The gold project in Western Australia has a current total mineral resource estimate of 29.1 million tonnes at 1.2g/t AU for 1.1 million ounces of gold
Ramelius Resources has entered into a bid implementation agreement (BIA) to acquire Apollo Consolidated, the 100% owner of the Lake Rebecca gold project in Western Australia, for an equity value of nearly A$163m ($122m).
The Western Australian gold producer will acquire Apollo Consolidated by means of an off-market takeover offer.
Ramelius is offering A$0.562 ($0.42) per share to Apollo Consolidated’s shareholders. This will be made up of A$0.34 ($0.25) in cash and 0.1375 Ramelius’ shares.
The offer price implies an enterprise value for the gold exploration company at A$128m ($95.56m).
Apollo Consolidated’s board of directors has recommended unanimously that the company’s shareholders accept the offer should there be no superior offer.
Its directors and management have signed binding agreements to tender their shares in the company. Currently, they own or control a 13.7% stake in Apollo Consolidated.
Apollo Consolidated managing director Nick Castleden said: “The Offer follows a period of significant corporate interest in Apollo and delivers an excellent result for our shareholders who, over the years, have seen Lake Rebecca transition from a greenfield exploration play to its status as a potential future stand-alone, long-life production asset.
“Ramelius brings excellent credentials in the business of taking new gold projects online and has ample experience, personnel, and funding to take the Project forward.”
The Lake Rebecca gold project has a current total mineral resource estimate of 29.1 million tonnes (Mt) at 1.2g/t for 1.1 million ounces of gold.
Ramelius believes that Lake Rebecca offers it a highly attractive platform for the potential development of a new production centre for the company in the future.
The company said its strong financial position and two existing cash generating operations in Western Australia will provide additional borrowing capacity to offer alternative funding sources to develop the Lake Rebecca gold project without dilution of shareholders.
Currently, Ramelius owns and operates the Mt Magnet, Edna May, Penny, Vivien, Marda, and Tampia gold mines located in Western Australia.
Ramelius Resources managing director Mark Zeptner said: “Lake Rebecca is an outstanding opportunity for Ramelius to add a key growth asset to its portfolio of producing assets at Mount Magnet and Edna May.
“The Apollo team has done an excellent job advancing Lake Rebecca to its current stage of development and have clearly demonstrated its potential for development into a high-quality gold mine in a tier-one gold mining jurisdiction.”
Zeptner added that Ramelius’ target for the Lake Rebecca gold project is to identify a plan to achieve a mine life of 10 years at a run rate of at least 100,000 ounces per year.
The takeover offer is subject to a 90% acceptance by Apollo Consolidated’s shareholders, regulatory approvals, and other conditions.