Goldminer Ramelius Resources has lodged a $208 million takeover offer for Spectrum Metals, after Spectrum settled its disputes with Venus Metals Corporation in relation to the acquisition of the Penny West gold project in Western Australia.
Goldminer Ramelius Resources has lodged a $208 million takeover offer for Spectrum Metals, after Spectrum settled its disputes with Venus Metals Corporation in relation to the acquisition of the Penny West gold project in Western Australia.
Shares in Spectrum Metals closed up 36 per cent on the news to trade at 14 cents per share.
Spectrum shareholders will receive one Ramelius share for every 10 Spectrum shares held, as well as 1.7 cents cash per Spectrum share, valuing Spectrum shares at 15 cents each.
Ramelius, which holds a 4.9 per cent interest in Spectrum, said the acquisition would be funded from its existing working capital or its recently established $35 million syndicated loan agreement with three banks.
The Spectrum board has unanimously recommended shareholders accept the offer.
On Friday, Spectrum agreed to pay $850,000 to Venus Metals Corporation to settle claims against Spectrum and its subsidiary Zebra Minerals in relation to a deal with Shaw and Partners (formerly DJ Carmichael).
In October last year, Venus Metals launched legal proceedings against DJ Carmichael directors Davide Bosio and Paul Adams, alleging breaches of fiduciary duty, breaches of confidence, and misuse of information it had provided to the directors in 2018.
Both Mr Bosio and Mr Adams were directors of Spectrum during that time.
Today, DJ Carmichael agreed to pay $150,000 to Venus Metals Corporation as a contribution to Venus’s legal costs.
In a statement, Venus said the payment was not made as a settlement sum.
The parties said the agreement was purely a commercial settlement.
The Penny West gold project, situated 550 kilometres north-east of Perth, became Spectrum’s key asset after it acquired the project in 2018.
Ramelius said Penny West had one of the highest-grade undeveloped gold assets in Australia with a gold resource of 355,500 ounces.
The company said there would be significant synergies between Penny West and its existing Mt Magnet operation.
It described Penny West as a near-term development opportunity, with the ore to be processed at Mt Magnet.
Ramelius had annual production last year of 196,000oz from its Mt Magnet and Edna May gold operations in WA.
The acquisition follows the purchase of the Marda and Tampia Hill gold projects last year.
“This compelling offer is the next step in that growth strategy and is expected to provide significant benefits to both Spectrum and Ramelius shareholders,” Ramelius managing director Mark Zeptner said.
Ramelius has engaged Adelaide Equity Partners and Hartleys as financial advisers to the acquisition, and Allion Partners and Bennett + Co as legal advisers.
