Cardinal Resources Ltd (ASX:CDV) has raised A$11.96 million as a result of the issue of 26 million fully paid ordinary shares to Shandong Gold Mining (Hong Kong) Co Ltd (HKG:1787) in accordance with the terms of the bid implementation agreement (BIA) from Shandong released on June 18, 2020.
This is a component of an offer for the West African gold company from Shandong with completion of the placement subject to and conditional upon no competing proposal being received by Cardinal within 14 days from entering the BIA.
No such superior proposal emerged, allowing the placement, which does not require shareholder approval, to proceed.
Shandong Gold has agreed to acquire 100% of the issued and outstanding ordinary shares in Cardinal at a price of 60 cents cash per share, by way of an off‐market takeover offer.
The proposed offer requires several conditions to be met, including a 50.1% minimum acceptance condition and is subject to the approval of several Chinese regulatory bodies including:
- The National Development and Reform Commission of the People’s Republic of China (or its relevant local branch);
- The Ministry of Commerce of the People’s Republic of China (or its relevant local branch); and
- The State Administration of Foreign Exchange of the People’s Republic of China (or its relevant local branch).
“Strong offer for shareholders”
When Cardinal’s board of directors received the cash takeover offer in June, they unanimously recommended that all Cardinal shareholders accept it in the absence of a superior proposal.
Chief executive officer and managing director Archie Koimtsidis said at the time: “The board of directors of Cardinal has negotiated what we consider a strong offer for our shareholders and one which delivers a significant premium to Cardinal’s market price, at a time of considerable volatility and uncertainty in global markets.
“This is an opportunity for shareholders to crystalise their investment in Cardinal at an attractive price.”
The bidder’s statement and target’s statement will be dispatched to Cardinal shareholders on or about July 22, 2020, and will set out important information, including how to accept the offer, information about Shandong Gold and the key reasons why Cardinal shareholders should accept the offer in the absence of a superior proposal.
Namdini project development
Funds raised by this placement will be used to ensure Cardinal may continue advancing the Namdini Project in Ghana towards development and for working capital.
Koimtsidis said at the time: "I am pleased that Shandong Gold is committed to getting on with development of Namdini to establish the first long-life gold mine in the upper east region of Ghana, bringing many significant and long-lasting benefits to the local community and Ghana.”
Shandong Gold had a market capitalisation of approximately US$14.5 billion as at June 18, 2020, and in 2019 produced mined gold of 1.273 million ounces and generated revenue of US$9 billion and EBITDA of US$771 million.