Gold Road Resources has increased its bid to acquire all ordinary shares in DGO Gold, set to be the company’s final offer for the emerging explorer.
The revised proposal comprises 2.25 Gold Road shares for every DGO share, up from the 2.16-per-share bid the gold miner announced in early April.
This values DGO shares at $2.95 per share – a 7.6 per cent premium to the explorer’s 10-day volume-weighted average price (VWAP) of $2.74, which was calculated as of May 27.
“The offer enables DGO shareholders to gain exposure to a high-quality, liquid, ASX-200 gold producer,” Gold Road said in a statement.
“Gold Road is an established mid-tier Australian gold producer with a Tier-1 mine through its 50 per cent interest in Gruyere, and exploration projects in the under-explored and highly prospective Yamarna Greenstone Belt in Western Australia’s north-eastern Goldfields.”
Accompanying Gold Road’s assets, DGO has a 14.4 per cent stake in De Grey Mining, owner of the nine-million-ounce Mallina gold project in Western Australia.
The company also has stakes in other emerging gold companies Dacian Gold and Yandal Resources as well as its own portfolio of exploration tenements in the Pilbara, Yilgarn, Bryah and Stuart Shelf provinces in WA and South Australia.
Gold Road said it has received acceptances from 21.5 per cent of DGO shareholders and has received unanimous support from DGO directors, barring a superior proposal being made.
For the transaction to be completed, a minimum of 80 per cent of DGO shareholders will need to accept the deal, with Gold Road set to waive all remaining conditions within six days of the 80 per cent acceptance condition being met.
Gold Road said while the company intends this to be the final offer, it may be revised if a competing proposal is made, or if an announcement is made which Gold Road believes will cause a material positive change to DGO’s operational or financial circumstances. This includes potential announcements from De Grey, Yandal and Dacian.
The improved offer is set to expire on June 30, except in limited circumstances.