Resolute has another crack at Noble offer

Resolute Mining has sweetened its $85 million financing proposal for Noble Mineral Resources for a second time, after Noble said it continued to prefer to enter a similar funding deal with Chinese group Zhongrun Investment.

Noble reconfirmed its support for the Zhongrun offer today, calling it “the superior available option” for its financing requirements.

Zhongrun has proposed to invest $87.7 million in Noble, to take a 42 per cent stake.

Noble is seeking the funding to ramp up production at its flagship mine, the Bibiani gold project in western Ghana, to more than 150,000 ounces per year.

Resolute followed up Zhongrun’s offer with one of its own last week, submitting an $85 million financing proposal to fund Bibiani’s development.

Noble rejected that advance, labelling the offer inferior, uncertain and unequitable.

On Tuesday, Resolute added an unsecured $US15 million debt facility to assuage Noble’s short term concerns, saying it was effectively an advance on a $US20 million guarantee included in the original proposal.

Noble postponed a meeting of shareholders scheduled for Wednesday after Resolute unveiled its sweetened offer.

Noble managing director Wayne Norris, however, urged shareholders today to vote in favour of the Zhongrun transaction before or after the general meeting rescheduled for this Wednesday.

Mr Norris said suggestions by Resolute that Noble had failed to engage it regarding the proposal were incorrect.

“Noble has explained its concerns to Resolute in relation to its proposal; however Resolute has not addressed these concerns,” Mr Norris said in a statement.

“Noble cannot afford any further delays in the receipt of funding that is urgently required to maintain ongoing operations and meet current liabilities.”

In response today, Resolute extended the period for acceptance for the $US15 million short-term facility, and made the financing offer irrevocable until November 9.

Resolute also agreed to work with Noble and its advisers to further increase the certainty surrounding its financing offer.

“Resolute will continue to work with the company to ensure that, in light of Noble’s challenged financial position, Resolute’s proposal provides the funding that is urgently required to maintain Noble’s current operations and meet Noble’s current liabilities,” Resolute chief executive Peter Sullivan said.

Mr Sullivan said the company considered its financing offer a superior proposal to the mooted placement to Zhongrun.

At close of trade Noble shares were steady at 13 cents each, while Resolute’s stock was down half a cent at $1.89.