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Alkane Resources progresses $8 million investment in Explaurum Ltd

A takeover bid for Explaurum has not been improved, prompting the gold explorer to focus on implementing the Alkane transaction.
Bags of coins
Alkane has confidence in Explaurum’s Tampia Gold Project

Alkane Resources Limited (ASX:ALK) is progressing its $8 million investment in gold explorer Explaurum Ltd (ASX:EXU) after a takeover bid for the latter has not been improved.

Ramelius Resources Limited (ASX:RMS) has advised Explaurum that following a period of due diligence it is unable to improve the terms of its off-market scrip takeover offer.

This decision has prompted Explaurum to state that it is now focused on implementing the Alkane placement transaction.

READ: Alkane Resources to invest $8 million in gold junior Explaurum

In a statement that company said: “The Alkane transaction has been recommended by the Explaurum board as superior to the current Ramelius takeover offer.

“It is also noteworthy that Alkane entered the placement transaction after completing its own due diligence activities on Explaurum and the Tampia project.

“Alkane’s placement issue price of 12 cents per share represents a 26% premium to the implied Ramelius takeover offer price of 9.5 cents per share as at close of trade on November 26.

“The Alkane transaction also has no change of control implications.”

Alkane to hold 12.2% stake

Alkane’s $8 million placement funds, which will result in it holding a 12.2% stake in Explaurum, will be used to complete a bankable feasibility study for the Tampia project in WA.

READ: Alkane Resources' gold is fuelling prospects for Dubbo rare earths development

They will also be used to aggressively accelerate drilling across the Tampia region, including at the Mace deposit.

This work is expected to advance the Tampia project to a final investment decision during the first quarter of 2019.

Tampia has 675,000-ounce resource

Tampia, which is about 250 kilometres east of Perth in the Central Wheatbelt region of WA, has an initial ore resource containing 675,000 ounces at 1.79 g/t gold.

The Explaurum investment represents Alkane’s second in recent months and follows a $3.7 million transaction with Calidus Resources Ltd (ASX:CAI), which has the Warrawoona Gold Project.

Explaurum stated: “Both Explaurum and Ramelius would like to acknowledge that the recent engagement between the two companies was constructive and undertaken in good faith by both parties.”

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