Apollo Consolidated shares ascended after receiving an off-market takeover offer from WA gold player Ramelius Resources as the company ramps up pursuits for feasible gold assets.
The deal would see Ramelius add Apollo’s flagship Lake Rebecca project and its contained discoveries in WA’s Norseman Wiluna Region to its suite of producing and developing gold tenements.
The 160 square kilometre project hosts three gold deposits which are estimated to hold 840,000 ounces of gold accumulatively.
The Rebecca deposit is the largest of these tenements, believed to contain 640,000 ounces.
Pursuant to a bid implementation agreement between the parties, Apollo shareholders will be offered 56 cents per share held comprising $0.34 in cash and 0.1375 Ramelius shares for each Apollo share held.
The acquisition is aligned with Ramelius’ intentions to acquire in production or developing gold assets in the state, with Ramelius looking to develop Lake Rebecca into a 100,000 ounces per annum gold producing asset.
The ASX-lister’s existing projects include the Edna May and Mt Magnet mines.
Apollo directors have backed the buy and recommended its investors accept the deal on the basis the transaction could provide “value certainty” as and when Lake Rebecca comes online.
A 90 per cent minimum acceptance is required by Apollo stockholders for the buy to proceed.
Ramelius managing director Mark Zeptner said the Lake Rebeca project represented an outstanding opportunity for his company.
“The Apollo team has done an excellent job advancing Lake Rebecca to its current stage of development and have clearly demonstrated its potential for development into a high-quality gold mine” Mr Zeptner said.
The purchaser plans to undertake further explorational drilling and technical studies at the site in the hopes of producing a feasibility study, should the offer be successful.
“Ramelius is looking forward to ramping up the drilling program across the tenement package to expand the existing resource and ultimately developing Lake Rebecca into a cornerstone producing asset within.”
Apollo Managing Director Nick Castleden said the offer followed a period of significant corporate interest in Apollo.
“Lake Rebecca is clearly an excellent fit for Ramelius and the Ramelius shares that Apollo shareholders will receive offer the stability of a multi-project production house while maintaining exposure to the upside as Lake Rebecca progresses along the path to development,” Mr Castleden said.
Shares in Apollo enjoyed a 14.29 per cent rise on the news and are trading at 52 cents.
Ramelius shares are down 2.77 per cent to trade at $1.58.