West African gold explorer Azumah Resources (ASX: AZM) is yet to provide an official response to an unsolicited all cash offer from its Wa gold project joint venture partner and substantial shareholder Ibaera Capital, which also purported Azumah’s board had failed to provide a timely response to its direct proposals.
The fully funded offer of $0.028 per share is a 100% premium to Azumah’s closing price of $0.014 on the 17 September.
Ibaera currently holds 9.21% of Azumah and owns 42.5% of the duo’s Wa gold project.
According to Ibaera, the prospects for developing Wa have been improved since it became a joint venture partner.
Ibaera locked-in its 42.5% interest in Wa in June this year after spending US$11.25 million on exploration over about 15 months.
Earlier this month, Azumah noted the final phase of the feasibility study at Wa had begun.
With the advancing gold price, the company’s upward revised gold price of US$1,500 per ounce has boosted anticipated net post royalty pre-tax cashflow to US$448 million.
“Assuming a gold price of US$1,500/oz and with all other inputs being the same as were used in the 30 January 2019 feasibility study progress update, the estimated pre-tax post-government royalty NPV and IRR could increase to approximately US$309 million and 54%, respectively, illustrating the considerable gold price leverage that is inherent in the project,” Azumah managing director Stephen Stone said.
Wa gold project
Located in Ghana’s upper west region, three primary deposits have been identified at Wa as well as several satellite deposits.
The project’s current resource includes 2.8 million ounces of contained gold with an average grade of 1.7 grams per tonne gold.
In addition, a reserve of 18Mt at 1.77g/t gold for 1.028Moz has been calculated.
The project has in place two 15-year mining leases over the principal deposits and no impediments to developing the asset have been identified.
Wa also has the advantage of nearby infrastructure including grid power to site, quality roads, access to water and a nearby airstrip.
This afternoon’s news spurred Azumah’s share price up 100% to $0.028.