- Gold explorer Perseus Mining (PRU) has launched a $60 million takeover of junior miner Exore Resources (ERX)
- The full-scrip buyout offers Exore shareholders one Perseus share for every 12.79 Exore shares held
- At Perseus’ 10-day volume-weighted average price, this values the buyout at $59.8 million and prices Exore shares at 9.8 cents each
- By taking over Exore, Perseus gains access to the Bagoe and Liberty projects in Côte d’Ivoire, West Africa
- Exore is buying a 100 per cent interest in the projects, meaning if today’s deal goes through, they will be under Perseus’ full control
- Exore Directors have unanimously recommended shareholders vote “yes” to the takeover
- Shares in Exore are trading almost 40 per cent higher today and worth 8.6 cents each
- Meanwhile, Perseus shares have declined by 12.7 per cent and are currently worth $1.17 each
Gold explorer Perseus Mining (PRU) has launched a $60 million takeover of fellow ASX-listed junior miner Exore Resources (ERX).
Perseus will absorb Exore through a full-scrip buyout under a scheme of arrangement. Exore shareholders will bag one Perseus share for every 12.79 Exore shares held.
At Perseus’ last closing price of $1.34, this values the deal at $64 million and prices Exore shares at 10.5 cents. At Perseus’ 10-day volume-weighted average price, the deal is worth $59.8 million and values Exore shares at 9.8 cents each.
Given Exore shares traded around six cents each for nearly the whole of May, either option is a healthy premium to the company’s share price.
The Exore board has unanimously recommended that shareholders vote in favour of the scheme.
Why the buy?
At the forefront of the purchase is Exore’s Bagoe and Liberty Projects in northern Côte d’Ivoire, West Africa — near Perseus’ Sissingué Gold Mine. Exore bought an 80 per cent interest in the projects through a joint venture with Apollo Consolidated (AOP) in late 2018.
Since then, Exore has expanded its landholding in the area to roughly 2000 square metres through various joint venture and earn-in deals. Importantly, Exore also outlined a JORC Compliant Mineral Resources at the Bagoe project containing 90,000 ounces of gold as an Indicated Resource and 440,000 ounces as an Inferred Mineral Resource.
Today, Exore told shareholders it will be buying the remaining 20 per cent interest in Bagoe and Liberty for US$4.5 million (roughly A$6.5 million), meaning it will have full control of the projects.
Of course, with today’s takeover deal, this means Perseus will own 100 per cent of the projects.
Persues Managing Director and CEO Jeff Quartermaine said Exore’s 2000-square-kilometre landholding is an attractive purchase for the company.
“With the acquisition of Exore’s land package, including defined Mineral Resources at the Bagoe Project, we have the option of developing the Bagoe Project into a new gold mine potentially using the Sissingué infrastructure, or alternatively, delineating further Mineral Resources that can be economically mined and trucked to our Sissingué plant for processing,” Jeff said.
Either way, he said, the Exore buyout creates major value for Perseus shareholders.
Exore Managing Director Justin Tremain shared similar sentiments, saying the merging of the companies represents compelling value for Exore shareholders.
“In addition to the premium implied by the transaction consideration, Exore shareholders have the opportunity to benefit, at a time of near-record gold prices, from Perseus’s strong development and production capabilities which position Perseus as the ideal counterparty to unlock the future value of the company’s Bagoe project, whilst de-risking the need for Exore to discover additional ounces to support a standalone operation or fund a standalone development,” Justin explained.
The buyout is subject to shareholder and regulatory approvals, but the companies said they expect the deal to be completed by mid-September 2020.
Today, Exore shares are trading a healthy 38.7 per cent higher, worth 8.6 cents each at 1:38 pm AEST.
Meanwhile, Perseus shares have taken a bit of a beating following the news of the takeover, currently 12.7 per cent lower at $1.17 each.