Ramelius tables $130m Breaker takeover

Mark Zeptner-led goldminer Ramelius Resources is continuing an acquisitive streak by launching a friendly scrip takeover for Eastern Goldfields explorer Breaker Resources.

The pair took to the market this morning advising they had struck a bid implementation agreement under which Ramelius is proposing to buy all shares in Breaker, offering investors 1 Ramelius share for every 2.82 Breaker shares they hold.

The offer on the table for Breaker works out at approximately 40 cents per share and values the target at $130.7 million overall.

Breaker’s leading asset is the Lake Roe Gold project, a potential greenfields discovery situated 50 kilometres from Ramelius’s Rebecca project in the Norseman-Wiluna Greenstone Belt.

Ramelius acquired that project as part of its $181 million acquisition of Apollo Consolidated in 2022 and says its fresh bid for Breaker is a pathway to developing a new production hub, a plan it has worked towards with a streak of deals.

Ramelius bought the producing Edna May goldmine from Evolution Mining in 2017 and the Marda project from now-delisted Black Oak Minerals in 2019.

That was followed by the purchase of the Tampia goldmine, located in Western Australia’s Wheatbelt, from Explaurum Limited in 2019, and the Penny goldmine as part of a takeover of Spectrum Metals in 2020.

“Lake Roe is an outstanding opportunity for Ramelius to consolidate its Rebecca acquisition from 2022 with almost three million ounces in combined resources, underpinning a likely future production centre for the company,” chief executive Mark Zeptner said.

“Subject to the offer being successful, Ramelius is looking forward to restarting the drilling program across the tenement package to expand the existing resource, and ultimately developing Lake Roe into a long-life producing asset along with our Rebecca project

“Whilst we are busy completing PFS work at Rebecca, with a June 2023 completion target, we will need to consider what this acquisition means for the overall project.”

Members of the Breaker board, who hold approximately 4 per cent of the company, say they intend to accept the offer and have unanimously recommended shareholders do the same.

Two major shareholders in Breaker - Electrum Strategic Opportunities Fund and Paulson & Co – have also said they will accept the deal in respect of their 19.92 per cent combined interest in the company.

Both of those acceptances are reliant on there being no superior offer put forward.

The offer is subject to a minimum 50.1 per cent acceptance by Breaker shareholders, with a bidder’s and target’s statement expected to be sent to shareholders next week.

Canaccord Genuity and Allion Partners are financial and legal advisers respectively in the Ramelius camp, with Breaker engaging HopgoodGanim Lawyers as its legal adviser.

Breaker Resources chief executive Sam Smith said it was a logic and sensible combination of assets that would eventually see Lake Roe become a mine.

“For Breaker shareholders to swap their Breaker shares for Ramelius shares at an attractive premium and retain full exposure to the upside at Lake Roe is compelling,” he said.

“Our board has accepted and recommended this transaction in the absence of a superior proposal. If that was to eventuate the rewards for Breaker shareholders would only be greater.”

Shares in Breaker Resources were up some 30 per cent following the proposal to trade at 38 cents, implying a market capitalisation of about $122 million. 

Ramelius shares were off 3.1 per cent to trade at $1.10.