Perseus Mining Limited (“Perseus” or the “Company”) (TSX & ASX:
PRU) wishes to advise that Perseus and Exore Resources Limited
(ASX:ERX) have entered into a Scheme Implementation Deed under
which it is proposed that Perseus (or a subsidiary of Perseus) will
acquire 100% of the issued share capital of Exore by way of scheme
of arrangement.
HIGHLIGHTS
- Perseus to acquire 100% of Exore by way of scheme of
arrangement in an all-share transaction under which, if
implemented, Exore shareholders will receive 1 Perseus share for
every 12.79 Exore shares held
- The Scheme delivers compelling value to Exore shareholders:•
Based on Perseus’s 10 trading day VWAP, Scheme Consideration values
Exore at a fully diluted equity value of A$59.8 million1 or A$0.098
per share• Based on Perseus’s last closing share price on June 2,
2020, Scheme Consideration values Exore at a fully diluted equity
value of A$64.0 million1 or A$0.105 per share
- At Perseus’s last closing price, the Implied Scheme
Consideration represents a premium of:• 69% to Exore’s closing
share price of A$0.062 on June 2, 2020• 78% to the 20 trading day
VWAP of Exore of A$0.059, up to and including June 2, 2020
- This is equivalent to a 56.9% premium based on the 20 trading
day VWAP of both companies
- The Exore Board unanimously recommends that Exore shareholders
vote in favour of the Scheme, in the absence of a superior proposal
and subject to an Independent Expert’s report concluding that the
Scheme is in the best interests of Exore shareholders
- Exore has elected to exercise its pre-emptive right over
Apollo’s 20% joint venture interest in the Bagoé and Liberty
Projects in northern Côte d’Ivoire for US$4.5 million to obtain
100% ownership
1 Calculated based on 589,356,105 ordinary shares
outstanding, plus 20,616,667 outstanding performance options that
are expected to vest and be exercised prior to the record date,
plus 5,000,000 options to be cancelled in consideration for Perseus
shares
- Shareholders of both Perseus and Exore are expected to benefit
from the increased strength of the combined entity• Exore’s Bagoé
project in northern Côte d’Ivoire has a maiden JORC-compliant
Mineral Resource containing 90,000 ounces of gold classified as an
Indicated Mineral Resource and a further 440,000 ounces classified
as an Inferred Mineral Resource• The Mineral Resources defined at
the Bagoé project are within trucking distance of Perseus’s
Sissingué Gold Mine• Perseus has the financial capacity, technical
expertise and in-country experience to advance the Bagoé and
Liberty projects as well as explore Exore’s highly prospective
~2,000km2 land package
- Perseus’s offer allows Exore shareholders to retain exposure to
Exore’s exploration potential as well as gain exposure to Perseus’s
multi-mine, multi-jurisdictional portfolio of profitable mining and
development operations, its highly competent technical team and
“licence to operate” in West Africa
Transaction Summary
Perseus and Exore have entered into a Scheme Implementation Deed
under which it is proposed that Perseus (or a subsidiary of
Perseus) will acquire 100% of the issued share capital of Exore by
way of scheme of arrangement.
Exore has elected to exercise its pre-emptive right to acquire
the remaining 20% interest in the Bagoé and Liberty Projects from
Apollo Consolidated Limited for US$4.5 million which, upon
completion of that transaction, will result in Exore owning 100% of
the Bagoé and Liberty projects. Exore will fund this acquisition
from its existing cash.
The Scheme Consideration of A$59.8 million is calculated on a
fully diluted basis1 applying a purchase price of A$0.098 per share
(based on Perseus’s 10 trading day VWAP). Consideration is to be
paid in the form of shares in Perseus with each Exore shareholder
receiving 1 Perseus share for every 12.79 Exore shares held. This
share swap ratio is based on the 10 day VWAP of Perseus shares on 2
June 2020 and implies a price of A$0.105 per Exore share based on
Perseus’s closing share price on the same date.
The Implied Scheme Consideration represents a premium of:
- 69% to Exore’s closing share price of A$0.062 on June 2,
2020;
- 78% to the 20 trading day VWAP of Exore of A$0.059, up to and
including June 2, 2020
Transaction Rationale
Exore holds approximately 2,000 square
kilometres of highly prospective land in northern Côte d’Ivoire,
near Perseus’s Sissingué Gold Mine. Exore acquired an 80% joint
venture in exploration permits that make up the Bagoé and Liberty
projects, which cover 816 square kilometres, from Apollo in
December 2018. Exore subsequently expanded this position to
approximately 2,000 square kilometres through additional earn-in
and joint venture agreements with local Ivorian groups. Exore
recently announced a JORC Compliant Mineral Resource at its Bagoé
Project comprising Indicated Mineral Resources of 0.75Mt @ 3.5g/t
for 90,000 ounces of gold contained, and Inferred Mineral Resources
of 5.85Mt @ 2.3g/t for 440,000 ounces of gold contained.
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Bagoé Gold Project, Côte d’Ivoire JORC 2012 Mineral
Resource Estimate1 |
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Cut-Off |
Classification |
Tonnes (kt) |
Gold Grade |
Ounces |
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0.5g/t |
Indicated |
950 |
3.0g/t |
90,000 |
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Inferred |
8,800 |
1.8g/t |
510,000 |
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Total |
9,750 |
1.9g/t |
600,000 |
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1.0g/t |
Indicated |
750 |
3.5g/t |
90,000 |
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Inferred |
5,850 |
2.3g/t |
440,000 |
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Total |
6,650 |
2.5g/t |
530,000 |
Perseus is a multi-mine, multi-jurisdictional explorer,
developer and producer of gold with a solid track record of
successfully operating in West Africa. Perseus currently has two
producing gold mines, one in Ghana and the other in Côte d’Ivoire,
and a third mine, also in Côte d’Ivoire, in development. Perseus is
on track to produce more than 500,000 ounces of gold per year with
three mines in operation, generating a cash margin of more than
US$400 per ounce from financial year 2022.
Perseus Managing Director and CEO Jeff
Quartermaine said:
“The acquisition of Exore results in Perseus
gaining ownership of approximately 2,000 square kilometres of
geologically prospective land in northern Côte d’Ivoire, close to
our operating Sissingué Gold Mine. Sissingué currently has a mine
life of three years from 1 July 2020, and with the acquisition of
Exore’s land package, including defined Mineral Resources at the
Bagoé Project, we have the option of developing the Bagoé Project
into a new gold mine potentially using the Sissingué
infrastructure, or alternatively, delineating further Mineral
Resources that can be economically mined and trucked to our
Sissingué plant for processing. Either option provides an
opportunity to continue creating value for Perseus’s
shareholders.”
Exore Managing Director Justin Tremain said:
“The Board of Exore believes the proposed
transaction with Perseus represents compelling value for Exore
shareholders. In addition to the premium implied by the transaction
consideration, Exore shareholders have the opportunity to benefit,
at a time of near record gold prices, from Perseus’s strong
development and production capabilities which position Perseus as
the ideal counterparty to unlock the future value of the company’s
Bagoé project, whilst de-risking the need for Exore to discover
additional ounces to support a standalone operation or fund a
standalone development.
There are significant potential synergies that
can be realised by utilising Perseus’s pre-existing infrastructure
in any future development of Exore’s projects with the Sissingué
infrastructure comfortably within trucking distance of the Bagoé
project. Exore shareholders will also benefit from exposure to
Perseus’s existing production and development assets, which provide
an exceptional growth profile.”
______________________________2 Refer to ASX
announcement released by Exore on May 4, 2020 titled “Maiden Gold
Resource of 530,000 ounces at 2.5g/t” for more detail
Exore Board unanimously recommends the
Scheme
The Board of Exore unanimously recommend that Exore shareholders
vote in favour of the Scheme, in the absence of a superior proposal
and subject to an independent expert’s report concluding that the
Scheme is in the best interests of Exore shareholders. Exore
Directors intend to vote in favour of the Scheme in respect of all
the Exore shares which they control, subject to those same
qualifications.
Benefits to Perseus
Shareholders
- Acquisition of shallow relatively high-grade Mineral Resources
at Bagoé that remain open for further exploration
- If expanded, the Mineral Resource may be able to be developed
in-situ or alternatively, may be economically trucked for
processing through the mill at Perseus’s near-by Sissingué Gold
Mine and in the process, extend the life of the Sissingué operation
without major capital investment
- Acquisition of a highly prospective 2,000km2 land package in
close proximity to Sissingué that is relatively under-explored but
known to host geological structures on which several significant
gold discoveries have previously been made
Benefits to Exore
Shareholders
- The Implied Scheme Consideration represents a significant
premium of 69% to last close and 78% to 20 trading day
VWAP
- Through Perseus scrip consideration, retain exposure to Exore’s
assets and future upside associated with exploration (including the
Bagoé and Liberty Project of which, as mentioned above, Exore will
obtain 100% ownership after having exercised its pre-emptive right
over Apollo’s 20% interest)
- Benefit from exposure to Perseus’s two producing gold mines and
third mine in development (currently on time and on budget for
first gold in December 2020)
- Benefit from significantly enhanced trading liquidity, scale,
and asset diversification
- Benefit from Perseus’s operational experience in West Africa,
with proven success in developing and operating gold
mines
- Mitigates development risks including permitting, capex and
funding
Details of the Scheme Implementation
Deed
The implementation of the Scheme is subject to
several conditions, including:
- Exore shareholder approval;
- Court approvals;
- An Independent Expert’s report concluding the Scheme is in the
best interests of Exore shareholders and not changing that
conclusion;
- There being no Exore Material Adverse Change, Exore Prescribed
Occurrence, Perseus Material Adverse Change or Perseus Prescribed
Occurrence (each as defined in the Scheme Implementation Deed);
and
- Other conditions customary for a transaction of this nature
including TSX approval.
The Scheme Implementation Deed contains standard
“no shop”, “no talk”, “notification” and “matching rights”
provisions, with a reciprocal break fee payable in certain
circumstances. The “no talk” obligation is subject to a customary
fiduciary carve-out.
A copy of the Scheme Implementation Deed, which
includes full details of the conditions to the Scheme, is available
on www.asx.com, www.perseusmining.com and www.sedar.com. Perseus
intends to rely on the exemption for Eligible Interlisted Issuers
in Section 602.1 of the TSX Company Manual in connection with the
transaction.
Indicative Timetable
A scheme booklet containing information relating
to the proposed acquisition, reasons for the directors’
recommendation, an Independent Expert’s report and details of the
Scheme meeting will be prepared and provided to Exore shareholders
in due course.
Exore shareholders will then be able to vote on
the Scheme at a Court-convened shareholder meeting, which is
expected to be held in late August or early September 2020.
Subject to shareholder approval being obtained
and the other conditions of the Scheme being satisfied, the Scheme
is expected to be implemented in mid-September 2020.
These dates are indicative only and may
change.
Advisors
Perseus has appointed Sternship Advisers as
financial advisor and Corrs Westgarth Chambers as legal
advisor.
Exore has appointed Hartleys Limited as
financial advisor and Gilbert + Tobin as legal advisor.
Investor Call
A video conference on the transaction will be
held for the investment community on Wednesday June 3, 2020
commencing at 10.00am (AWST) / 12.00pm (AEST). Investors,
brokers, analysts and media can join the video conference through
the link below:
https://us02web.zoom.us/webinar/register/WN_oqu3MISzTfaCAcV5qnMYxQ
The Investor Presentation will be available via
the ASX Company announcements Platform (ASX and TSX code: PRU, ASX
code: ERX) as well as at Perseus’s website at www.perseusmining.com
and on www.sedar.com. A recording of the video conference will also
be available later today at Perseus’s website.
This announcement has been approved for release
by the Boards of Perseus and Exore.
For further information, please contact:
Perseus
Mining Limited |
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Managing
Director: |
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Jeff Quartermaine at telephone +61 8 6144 1700 or
emailjeff.quartermaine@perseusmining.com |
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Chief Financial
Officer: |
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Elissa Brown at telephone +61 8 6144 1700 or
emailElissa.brown@perseusmining.com |
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General Manager BD &
IR: |
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Andrew Grove at telephone +61 8 6144 1700 or
emailandrew.grove@perseusmining.com |
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Media
Relations: |
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Nathan Ryan at telephone +61 4 20 582 887 or
emailnathan.ryan@nwrcommunications.com.au (Melbourne) |
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Exore Competent Person Statement: This
announcement includes information that relates to Exore’s mineral
resources, ore reserves and exploration results. This information
was prepared by and is the responsibility of Exore only. It is
extracted from Exore’s announcement dated 4 May 2020.
These announcements are available to view on
www.exoreresources.com.au. These announcements set out the key
assumptions, mining and processing parameters and methods used to
prepare the estimates. Exore confirms that it is not aware of any
new information or data that materially affect the information in
those market releases and that all material assumptions
underpinning those estimates and the production targets, or the
forecast financial information derived therefrom, continue to apply
and have not materially changed.
Perseus has not undertaken sufficient work to
independently verify Exore’s mineral resources, and further
evaluation work and appropriate studies will be done by Perseus
following completion of the Transaction.
Perseus Competent Person
Statement:
All production targets for the Edikan and
Sissingué Gold Mines referred to in this report are underpinned by
estimated Ore Reserves which have been prepared by competent
persons in accordance with the requirements of the JORC Code.
The information in this report that relates to Mineral Resources
and Ore Reserves for the Esuajah North deposit at the Edikan Gold
Mine was first reported by the Company in compliance with the JORC
Code 2012 and NI43-101 in a market announcement entitled “Perseus
Mining Updates Mineral Resources & Ore Reserves” released on 29
August 2019. The information in this report that relates to
the Mineral Resources for the Edikan deposits (other than the
Fetish, AFG, Bokitsi South, Esuajah North and Esuajah South
deposits) was first reported by the Company in compliance with the
JORC Code 2012 and NI43-101 in a market announcement released on 29
August 2018. The information in this report that relates to
Ore Reserves for the Edikan deposits (other than the Fetish, AFG,
Bokitsi South, Esuajah North and Esuajah South deposits) was first
reported by the Company in compliance with the JORC Code 2012 and
NI43-101 in a market announcement entitled “Perseus Mining Updates
Mineral Resources & Ore Reserves” released on 29 August
2018. The above-mentioned deposits have been updated for
mining depletion as at 31 December 2019 in a market announcement
“Perseus Mining Updates Edikan Gold Mine’s Mineral Resource &
Ore Reserves” released on 20 February 2020. The information in this
report that relates to the Mineral Resource and Ore Reserve
estimates for the Bokitsi South and Esuajah South underground and
to the Ore Reserve estimates for the Fetish and AFG deposits at the
Edikan Gold Mine was first reported by the Company in compliance
with the JORC Code 2012 and NI43-101 in a market announcement
“Perseus Mining Updates Edikan Gold Mine’s Mineral Resource &
Ore Reserves” released on 20 February 2020. The Company further
confirms that material assumptions underpinning the estimates of
Ore Reserves described in “Technical Report — Central Ashanti Gold
Project, Ghana” dated 30 May 2011 continue to apply.
The information in this report that relates to
Mineral Resources and Ore Reserves for Sissingué was first reported
by the Company in compliance with the JORC Code 2012 and NI43-101
in a market announcement released on 20 October 2018 and includes
an update for depletion as at 30 June 2019 in a market announcement
released on 28 August 2019. In respect of the Fimbiasso East and
West deposits, previously Bélé East and West respectively, the
Company confirms that material assumptions underpinning the
estimates of Mineral Resources and Ore Reserves described in market
announcements dated 20 February 2017 and 31 March 2017 respectively
continue to apply with the exception that the reported resources
are now constrained to a US$1,800/oz pit shell as advised in a
market announcement dated 29 August 2018. The Company confirms that
it is not aware of any new information or data that materially
affect the information in these market releases and that all
material assumptions underpinning those estimates and the
production targets, or the forecast financial information derived
therefrom, continue to apply and have not materially changed. The
Company further confirms that material assumptions underpinning the
estimates of Ore Reserves described in “Technical Report —
Sissingué Gold Project, Côte d’Ivoire” dated 29 May 2015 continue
to apply.
The information in this report in relation to Yaouré Mineral
Resource and Ore Reserve estimates was first reported by the
Company in compliance with the JORC Code 2012 and NI43-101 in a
market announcement on 28 August 2019. The Company confirms that
all material assumptions underpinning those estimates and the
production targets, or the forecast financial information derived
therefrom, in that market release continue to apply and have not
materially changed. The Company further confirms that material
assumptions underpinning the estimates of Ore Reserves described in
“Technical Report — Yaouré Gold Project, Côte d’Ivoire” dated 18
December 2017 continue to apply.
Caution Regarding Forward Looking
Information: This report contains forward-looking
information which is based on the assumptions, estimates, analysis
and opinions of management made in light of its experience and its
perception of trends, current conditions and expected developments,
as well as other factors that management of Perseus believes to be
relevant and reasonable in the circumstances at the date that such
statements are made, but which may prove to be incorrect.
Assumptions have been made by Perseus regarding, among other
things: the price of gold, continuing commercial production without
any major disruption due to the COVID-19 pandemic or otherwise,
development of new mines, the receipt of required governmental
approvals, the accuracy of capital and operating cost estimates,
the ability of Perseus to operate in a safe, efficient and
effective manner and the ability of Perseus to obtain financing as
and when required and on reasonable terms. Readers are cautioned
that the foregoing list is not exhaustive of all factors and
assumptions which may have been used by Perseus. Although
management believes that the assumptions made by Perseus and the
expectations represented by such information are reasonable, there
can be no assurance that the forward-looking information will prove
to be accurate. Forward-looking information involves known and
unknown risks, uncertainties, and other factors which may cause the
actual results, performance or achievements of Perseus to be
materially different from any anticipated future results,
performance or achievements expressed or implied by such
forward-looking information. Such factors include, among others,
the actual market price of gold, the actual results of current
exploration, the actual results of future exploration, changes in
project parameters as plans continue to be evaluated, as well as
those factors disclosed in Perseus’s publicly filed documents.
Perseus believes that the assumptions and expectations reflected in
the forward-looking information are reasonable. Assumptions
have been made regarding, among other things, Perseus’s ability to
carry on its exploration and development activities, the timely
receipt of required approvals, the price of gold, the ability of
Perseus to operate in a safe, efficient and effective manner and
the ability of Perseus to obtain financing as and when required and
on reasonable terms. Readers should not place undue
reliance on forward-looking information. Perseus does not
undertake to update any forward-looking information, except in
accordance with applicable securities laws.
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