Saracen Mineral Holdings (ASX: SAR) has made a takeover play for gold explorer Bligh Resources (ASX: BGH), with Bligh’s board and largest shareholder Zeta Resources (ASX: ZER) endorsing the takeover which values the company at a 97% premium.
The rational behind the offer is to amalgamate Bligh’s Bundarra gold project with Saracen’s Thunderbox operations which are only 30km away.
Bligh’s Bundarra project has a JORC resource of 9.67 million tonnes at 2.1 grams per tonne gold for 660,000 ounces of contained gold and has a clear path to production.
The project is adjacent to a sealed highway and comprises five mining leases and six prospecting licences.
To-date, five gold deposits have been firmed up across the project and include Celtic North, Celtic South, Wonder West, Wonder North and Bluebush.
Meanwhile, for Saracen acquiring Bundarra represents a near-term development opportunity to shore up its nearby Thunderbox gold operation.
“The offer makes sense for both companies,” Saracen managing director Raleigh Finlayson noted.
“Saracen’s infrastructure at our nearby Thunderbox operations means we can unlock the value of Bundarra and this is reflected in the share price premium we have offered to Bligh shareholders,” he added.
The 100% scrip deal represents a 97% premium to Bligh’s closing price of $0.065 yesterday.
Under the deal Bligh holders will be issued 0.0369 Saracen shares for every Bligh share held.
This values Bligh at $0.128 per share and the company at $38.2 million.
Board and major shareholder back takeover
Bligh’s board and major shareholder Zeta, which owns more than 85% of the company, have backed the offer in absence of a superior proposal.
If the takeover gains all requisite shareholder and regulatory approvals, the transaction is expected to be completed in August.
As part of the takeover, Bligh has withdrawn an entitlement offer it launched last month that proposed to raise $2.86 million via the issue of one new share at $0.05 each for every five held.
News of the takeover pushed Bligh’s share price up more than 100% to reach $0.13 by midday. Zeta also rocketed on the news – soaring more than 19% to reach $0.37. Meanwhile, Saracen lifted almost 3% to reach $3.57.