Ramelius Resources Shares Down after Apollo Bid (ASX:RMS)

Ramelius Resources Shares Down after Apollo Bid (ASX:RMS)

The Ramelius Resources Ltd [ASX:RMS] share price is down today after making a takeover offer to buy Apollo Consolidated Ltd [ASX:AOP].

Ramelius is an ASX-listed gold producer that owns and operates several assets in Western Australia including Mt Magnet and Edna May.

Meanwhile, Apollo fully owns the Lake Rebecca Gold Project. The project, located in Western Australia around 150 km north-east from Kalgoorlie, has a total mineral resource estimate of 29.1 Mt @1.2 grams per tonne of gold for 1.1 million ounces. It currently has three main deposits: Rebecca, Duke, and Duchess.

Western Australia

Source: Ramelius

What’s the offer?

If Apollo shareholders take the offer, they’ll receive 34 cents in cash and 0.1375 Ramelius shares for every Apollo share they hold.

Apollo’s directors have all recommended shareholders accept the offer.

Apollo’s Managing Director Nick Castleden pointed out that:

 

Lake Rebecca is clearly an excellent fit for Ramelius’ >250,000oz/pa production profile, and the Ramelius shares that Apollo shareholders will receive offer the stability of a multi-project production house while maintaining exposure to the upside as Lake Rebecca progresses along the path to development.

 

Ramelius has set up a strategic target for Rebecca of 100,000 ounces per year and a mine life of 10 years.

Ramelius Managing Director Mark Zeptner said:

Lake Rebecca is an outstanding opportunity for Ramelius to add a key growth asset to its portfolio of producing assets at Mount Magnet and Edna May. The Apollo team has done an excellent job advancing Lake Rebecca to its current stage of development and have clearly demonstrated its potential for development into a high-quality gold mine in a tier-one gold mining jurisdiction.

Subject to the Offer being successful, Ramelius is looking forward to ramping up the drilling program across the tenement package to expand the existing resource and ultimately developing Lake Rebecca into a cornerstone producing asset within our portfolio.

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What happens next?

For the offer to go through, they need at least 90% of Apollo’s shareholders to accept it.

If it does go through, Ramelius plans to continue drilling the area as well as keep advancing technical studies already started by Apollo to produce a feasibility study.

At time of writing, Apollo’s shares are up over 14% and trading at 52 cents. Ramelius shares, on the other hand, are down 1.85%, trading at $1.60.

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Best,

Selva Freigedo,
For The Daily Reckoning Australia

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