RAMELIUS RAMPS UP M&A AC­TIV­I­TIES

The Australian Mining Review - - FRONT PAGE - AMY BLOM

RAMELIUS Re­sources has its sights set on more gold, re­cently launch­ing a takeover bid for ju­nior ex­plorer Ex­plau­rum and ink­ing a deal to pur­chase Black Oak Min­er­als’ Marda project.

In early Septem­ber, the miner launched an all scrip $59 mil­lion takeover bid for Ex­plau­rum, which owns the Tampia project, 140km south of its Edna May gold mine in WA.

Ramelius said it at­tempted to en­gage with the Ex­plau­rum board to “jointly ex­plore a rec­om­mended deal”, but had not come to an agree­ment so de­cided to put its of­fer di­rectly to share­hold­ers.

Ac­cord­ing to Ramelius man­ag­ing di­rec­tor Mark Zept­ner, there was clear logic in the com­bi­na­tion of Ex­plau­rum’s as­sets with Ramelius’ WA op­er­a­tions.

“After the suc­cess­ful ac­qui­si­tion of Edna May last year, Ramelius is fo­cussed on build­ing on its growth strat­egy to ex­tend mine life and max­imise the value of ex­ist­ing in­fra­struc­ture in its port­fo­lio,” Mr Zept­ner said.

“This com­pelling of­fer is the next step in that growth strat­egy and is ex­pected to pro­vide sig­nif­i­cant ben­e­fits to both Ex­plau­rum and Ramelius share­hold­ers.”

Ex­plau­rum hit back just days later, telling the mar­ket the Ramelius bid was ”wholly in­ad­e­quate”, and for share­hold­ers to “take no ac­tion”.

Ac­cord­ing to Ex­plau­rum, the Ramelius of­fer grossly un­der­val­ued the Tampia gold project and was ill-timed.

Ex­plau­rum was ex­pected to is­sue a tar­get state­ment in mid-Oc­to­ber with the di­rec­tors’ rec­om­men­da­tions to share­hold­ers.

Days later, Ramelius also signed a bind­ing agree­ment to ac­quire Black Oak Min­er­als’ Marda project for $13 mil­lion, which will act as a feed source for its Edna May mine.

Mr Zept­ner said the ac­qui­si­tion high­lighted the strength of its team in iden­ti­fy­ing op­por­tu­ni­ties for in­cre­men­tal ore feed around its key min­ing hubs of Mt Mag­net and Edna May.

“This has the po­ten­tial for sig­nif­i­cantly en­hanc­ing fu­ture eco­nom­ics at the Edna May mine yet does not de­tract from our abil­ity to ex­e­cute strate­gic trans­ac­tions in other ju­ris­dic­tions,” he said.

The ac­qui­si­tion news came a week be­fore Ramelius an­nounced it would com­mit to un­der­ground min­ing at Edna May, be­gin­ning early next year.

The miner had been con­sid­er­ing this op­tion ver­sus a $100 mil­lion cut­back of the ex­ist­ing open pit.

Mr Zept­ner said the de­ci­sion to move down the un­der­ground path had not been taken lightly.

“After ex­ten­sive stud­ies and con­sid­er­ing our fu­ture op­tions around other po­ten­tial ore sources in the area, we be­lieve this is a pru­dent de­ci­sion that will lead to ex­cep­tional fu­ture out­comes for our share­hold­ers,” Mr Zept­ner said.

Im­age:RameliusRe­sources.

Ramelius Re­sources has com­mit­ted to an early 2019 start for Edna May gold mine.

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