Gold Road Resources Limited (ASX: GOR) and DGO Gold Limited (ASX: DGO) have entered into a bid implementation agreement (BIA) for a recommended conditional off-market takeover offer pursuant to which Gold Road will offer to acquire all the issued and outstanding ordinary shares of DGO.
The all-scrip offer of 2.16 Gold Road shares for every DGO share implies an offer price of $3.55 per DGO share and an equity value of approximately $308 million.
DGO owns a portfolio of prospective exploration and mining assets which includes:
- a ~14.4% shareholding in ASX-listed De Grey Mining Ltd (the owner of the 9 million ounce Mallina Gold Project in Western Australia);
- a ~6.8% shareholding in ASX-listed Dacian Gold Ltd (the owner of the Mt Morgans gold mine);
- a ~20.1% shareholding in ASX-listed Yandal Resources Ltd (an exploration company focused on the Yandal Greenstone belt); and
- an attractive portfolio of exploration tenements in the Pilbara, Yilgarn, Bryah and Stuart Shelf Provinces.
Gold Road’s offer provides DGO shareholders with a compelling opportunity to realise value for their shares while retaining an ongoing exposure to DGO’s underlying assets through an interest in Gold Road.
DGO directors unanimously recommend DGO shareholders accept the offer in the absence of a superior offer and intend to accept the offer for all shares they own or control (representing ~16% of DGO’s shares on issue), in the absence of a superior offer. The offer is subject to an 80% minimum acceptance by DGO shareholders.
“The acquisition of DGO aligns with Gold Road’s strategy to invest in high-quality gold projects in Tier 1 jurisdictions,” Gold Road managing director Duncan Gibbs said.
“In particular, Gold Road views the substantial shareholding in the owner of the high-quality Hemi gold discovery, combined with our 50% ownership of the Gruyere gold mine, as an exciting opportunity to participate in two of the most significant gold discoveries in Western Australia this century.”
DGO Gold executive chairman Eduard Eshuys commented:
“I am proud of the high-quality portfolio of assets DGO Gold has accumulated.
“DGO has consistently traded at a discount to the value of its assets and this offer not only recognises and unlocks that value but provides DGO shareholders with ongoing exposure to these assets and the Gold Road portfolio, as part of a more liquid investment in a cash flow-generating ASX200 gold producer.”