Panoramic Resources, which owns 100% of the Savannah nickel sulphide mine in Western Australia, was issued an off-market takeover bid from Independence Group in November 2019
Panoramic Resources is the 100% owner of Savannah nickel sulphide mine. Credit: Pixabay/Alex Banner.
Independence Group (IGO) has pulled out from its proposal to take over rival Western Australian mining company Panoramic Resources for about AUD312m ($216.85m) citing breach of conditions by the latter.
The off-market takeover bid was launched by Independence Group in November 2019 in a move to gain access to Panoramic Resources’ 100% owned Savannah nickel sulphide mine in Western Australia.
Independence Group said that a number of conditions of the offer it made were breached and considering their significance, it has concluded not to waive them. The company also said that it does not intend to extend the offer period, which is set to lapse this month.
IGO CEO discloses reasons for withdrawing the offer to Panoramic Resources
Independence Group managing director and CEO Peter Bradford said: “Any M&A must deliver a return to our shareholders. At announcement, IGO’s off market takeover bid for Panoramic, which was based on the public disclosure of the 2017 Savannah Project feasibility study, represented a potential “win win” for both IGO and Panoramic shareholders.
“The subsequent disclosures by Panoramic, including the operational update and need for additional funding have significantly eroded the value proposition for IGO and its shareholders. Consequently, we have decided to allow the Offer for Panoramic to lapse.”
In December 2019, Panoramic Resources’ board rejected IGO’s offer citing that it was opportunistically timed, highly conditional, and was taking advantage of the company’s short term operational and financial underperformance.
The company’s board advised its shareholders that accepting IGO’s offer could reduce their exposure to improvements in operational performance in the near term, especially after gaining access to the Savannah North orebody.
The Savannah nickel sulphide mine and processing plant is located in East Kimberley. Panoramic Resources had operated the Lanfranchi Nickel Project as well in Western Australia prior to its sale to Black Mountain Metals.
The company’s other assets are two platinum group metals projects – the Panton Project in Western Australia and the Thunder Bay North Project in Ontario, Canada.
Independence Group, which had developed the Nova underground nickel-copper-cobalt mine in Western Australia, previously said that the offer to Panoramic Resources aligned with its focus on metals like nickel and copper that are critical to clean energy.
The company, at the time of making the offer, further claimed that it is well positioned to unlock value from the Savannah operation and also from the exploration portfolio of Panoramic Resources.