The company traded at an intra-day high of 11 cents after the offer of one Ramelius share for four of Explaurum, which values the target’s shares at 12.31 cents.
Explaurum, which is focused on the Tampia Hill Gold Project in Western Australia, has recommended that its shareholders take no action on the offer at this stage.
Tampia Hill near Edna May
Tampia Hill is near Narembeen, 240 kilometres east of Perth, and in close proximity to Ramelius’ Edna May operations.
In its takeover offer, Ramelius said the price offered was a 66.2% premium to the last closing price of Explaurum shares.
Ramelius believes that the “combination of the companies represents a compelling argument for mutually enhanced shareholder value”.
“Stable platform of mines”
In a statement it said: “Explaurum shareholders will become shareholders in a profitable, financially secure company with a stable platform of established Australian mines managed by a high-quality team:
Given Explaurum’s market capitalisation and the capital funding requirements for the Tampia Hill project, Ramelius said the offer reduced risks associated with remaining an Explaurum shareholder.
“The proximity of the Edna May mine to Explaurum’s Tampia Hill project provides potential to realise significant capital cost savings and operational synergies while maintaining exposure to ongoing exploration potential,” Ramelius stated.
Ramelius managing director Mark Zeptner said, “There is clear logic in the combination of Explaurum’s assets with Ramelius’ WA operations.
“After the successful acquisition of Edna May last year, Ramelius is focused on building on its growth strategy to extend mine life and maximise the value of existing infrastructure in its portfolio.
“This compelling offer is the next step in that growth strategy and is expected to provide significant benefits to both Explaurum and Ramelius shareholders.”