A new player has undercut Emerald Resources’ takeover bid for privately-run gold company Bullseye Mining.
Current Bullseye shareholder Au Xingao Investment has launched a $0.31 per share all cash bid for Bullseye, which would increase to $0.35 per share if Au Xingao is granted a 40 per cent stake in the company and can complete due diligence on Bullseye’s assets.
This would value Bullseye at $156 million, a jump from Emerald’s initial $0.30 per share, $117 million offer for the emerging gold player.
Emerald said that despite receiving Au Xingao’s bid, Bullseye has lent its support for the company’s original offer.
“Bullseye has advised that the Xingao proposal is highly conditional and does not constitute or give rise to an offer which is capable of acceptance by its shareholders,” Emerald said in a statement. “As such, the unanimous recommendation of the Emerald offer remains unchanged.”
In late December 2021, Bullseye released a target statement to its shareholders unanimously recommending Emerald’s takeover bid in the absence of a superior proposal.
Emerald’s offer has also been subject to an application to the Australian Government Takeovers Panel from Bullseye shareholder Hongkong Xinhe International Investment Company.
On January 10, the Hong Kong company sought the Takeovers Panel to investigate Emerald’s bid, suggesting “the target’s statement, and potentially the bidder’s statement, are deficient and prevent Bullseye shareholders making a properly informed decision in relation to the offer”.
The Takeovers Panel review is still ongoing.
As of February 7, Emerald had acquired a 55.87 per cent stake of the 445,599,851 Bullseye shares currently on issue.
Emerald managing director Morgan Hart remains optimistic the takeover can come to fruition.
“Emerald’s offer remains open for acceptance and we look forward to Bullseye shareholders joining us and participating in the growth of Bullseye’s highly prospective gold exploration tenements alongside our own advanced exploration opportunities in Cambodia,” he said.
“We take significant pride in our highly credentialed gold project development team who have delivered an operating Okvau gold mine on time and on budget, generating substantial cashflows, creating a new industry for Cambodia and bringing opportunities and benefits for the people of Cambodia.”
Emerald’s Okvau gold mine in Cambodia produced 26,395 ounces of gold in the December quarter of 2021. The mine has a production guidance of 25-30,000 ounces per quarter at a cost of $US720-780 per ounce for the 2022 financial year.
If Emerald’s takeover of Bullseye is successful, the company would add more than 1200 square kilometres of prospective gold licences to its portfolio, spanning three different projects in Western Australia.
Most notably, Bullseye’s North Laverton gold project covers 800 square kilometres, capturing the Dingo Range greenstone belt – one of the few under-explored greenstone belts remaining in Western Australia.