The Exore Resources Ltd (ASX: ERX) share price is going through the roof today after announcing it is set to be acquired by Perseus Mining Limited (ASX: PRU).
At the time of writing, Exore shares are sitting 38.71% higher for the day while Perseus shares have dropped 11.57% lower.
Exore is a junior Australian-based miner with gold projects in Cote d'Ivoire covering a combined area of 2,000 square kilometres.
What's the deal?
Subject to certain conditions, Perseus will acquire 100% of Exore by way of a scheme of arrangement in an all-share transaction. If implemented, Exore shareholders will receive 1 Perseus share for every 12.79 Exore shares held.
Based on Perseus' last closing price of $1.34, the scheme values Exore at a fully diluted equity value of $64 million, or 10.5 cents per share. This represents a 69% premium to Exore's last closing price of 6.2 cents per share.
Additionally, Exore has elected to exercise its pre-emptive right to acquire the remaining 20% interest in the Bagoe and Liberty projects from Apollo Consolidated. Exore will pay the consideration of US$4.5 million from its existing cash reserves.
Exore and Perseus believe both sets of shareholders will benefit from the increased strength of the combined entity.
Exore's 2,000 square kilometres of land in northern Cote d'Ivoire is located within trucking distance of Perseus' Sissingué Gold Mine. Additionally, Perseus believes it has the financial capacity, technical expertise and in-country experience to advance the Bagoe and Liberty projects, and also explore the balance of Exore's 2,000 square km land package.
What now?
Subject to the findings of an independent expert's report, Exore's board unanimously recommends that Exore shareholders vote in favour of the scheme. Along with Exore shareholder approval, the scheme is also subject to court approvals and TSX approval since Perseus is dual-listed on the Toronto Stock Exchange.
A scheme booklet will be sent to Exore shareholders in due course. It is anticipated that shareholders will then be able to vote on the scheme in late August or early September.
Commenting on the deal, Exore managing director Justin Tremain said:
"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 Bagoe project, whilst de-risking the need for Exore to discover additional ounces to support a standalone operation or fund a standalone development."
