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Alkane Resources gives notice to terminate $8 million Explaurum investment

The follows acceptance by Explaurum’s board of an improved takeover offer from Ramelius Resources.

Takeover bid written on paper
Alkane has requested that its $800,000 deposit be refunded

Alkane Resources Limited (ASX:ALK) has given notice to terminate its $8 million investment in Explaurum Ltd (ASX:EXU) after the latter’s board accepted an improved takeover off from Ramelius Resources Limited (ASX:RMS).

The share subscription agreement between Alkane and Explaurum represents a competing proposal to the accepted takeover.

In accordance with its rights under this agreement, Alkane has given notice of termination and requested that the $800,000 deposit be refunded and the $400,000 break fee paid.

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

The New South Wales gold producer and rare earths project developer intended to invest into Explaurum’s Tampia Gold Project in WA.

This investment was to be made through a placement of 66,666,675 ordinary Explaurum shares at an issue price of 12 cents per share, which would have given Alkane a 12.2% holding in Explaurum.

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

It formed part of Alkane’s strategy of investing in junior gold companies with projects that have passed due diligence review and Alkane’s investment criteria.

These criteria include high exploration potential as well as requiring near-term development funding.

Ramelius increased the consideration of its original offer by 2 cents cash per Explaurum share in addition to the existing consideration of 1 Ramelius share for every 4 Explaurum shares.

Quick facts: Alkane Resources Ltd

Price: 0.92 AUD

ASX:ALK
Market: ASX
Market Cap: $533.63 m
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