Evo­lu­tion could put paid to Phoenix

Kalgoorlie Miner - - NEWS - Jar­rod Lu­cas

The dam ap­pears ready to burst for Kal­go­or­lie-based Phoenix Gold, which is plug­ging holes to stave off a takeover bid by Evo­lu­tion Min­ing.

The Jake Klein-led Evo­lu­tion, Aus­tralia’s sec­ond-big­gest gold pro­ducer, yes­ter­day upped its stake in Phoenix to 32.31 per cent.

Evo­lu­tion con­trolled 19.8 per cent of Phoenix shares when it launched its takeover bid on Au­gust 20.

Fund man­ager Ge­o­logic last week agreed to fold its 9.03 per cent stake into the cash and scrip of­fer.

China’s Zi­jin Min­ing Group, which con­trols Nor­ton Gold Fields, is also be­lieved to be on the verge of ac­cept­ing Evo­lu­tion’s of­fer for its 8.9 per cent hold­ing.

Evo­lu­tion’s of­fer of 0.06 of its shares and 6¢ for ev­ery Phoenix unit ex­pires on Novem­ber 26.

The of­fer ini­tially val­ued Phoenix at $56.4 mil­lion, or 12¢ a share.

But Evo­lu­tion’s shares have since jumped from $1.04 to $1.46 yes­ter­day, valu­ing the of­fer at $69 mil­lion, or 14.7¢.

It is al­most within reach of in­de­pen­dent ex­pert BDO Cor­po­rate Fi­nance’s fair value range of 15.6¢ to 24.4¢.

Evo­lu­tion wants Phoenix’s 4Moz gold in­ven­tory to feed its Mun­gari mill.

Even if Evo­lu­tion’s of­fer is suc­cess­ful, Nor­ton will re­tain the right to mine Phoenix’s flag­ship Cas­tle Hill project, north-west of Kal­go­or­lie-Boul­der.

Mean­while, Ex­cel­sior Gold ma- nag­ing di­rec­tor David Ham­lyn says the fledg­ling pro­ducer will fun­nel prof­its from the Kal­go­or­lie North project into ex­plo­ration, claim­ing the com­pany has only scratched the sur­face.

Ex­cel­sior plans to mo­bilise con­trac­tors on site next month and pour the first gold from the 1.3Moz project early in the new year. It has done a deal with Nor­ton to process ore at the Padding­ton mill.

“We’re blessed to be in a pro­lific gold re­gion like Kal­go­or­lie,” Mr Ham­lyn said.

“When we first took this project on stock­bro­kers said Kal­go­or­lie has been done to death, there’s noth­ing left.

“The re­al­ity is it’s a good, safe en­vi­ron­ment to de­velop a gold project and there is plenty left out there.”

Kal­go­or­lie North has an ini­tial seven-year mine life and should de­liver 273,000 ounces.

Mr Ham­lyn said the ini­tial min­ing plan cov­ered only five of the 22 re­source ar­eas at Kal­go­or­lie North. “The project area has been over­looked for 20 years,” he said.

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