The Oklo Resources Ltd (ASX: OKU) share price is soaring to its highest level this year on the back of a takeover bid.
The junior gold explorer announced after the market closed yesterday that B2Gold Corp. (TSE: BTO) made a circa $90 million offer for the ASX minnow.
Big takeover premium for Oklo shares
The Canadian miner is offering to pay 5.25 cents and swap 0.0206 B2Gold shares for every Oklo share.
This implies a total offer price of 17.25 cents per Oklo share based on today's exchange rate.
The Oklo share price surged 87% to 14 cents during lunchtime trade. In contrast, the S&P/ASX All Ordinaries Index (ASX: XAO) gained 0.8%.
It isn't surprising to see the Okla share price trade under the offer price. The target's shareholders have to wear the risk when it comes to the exchange rate and B2Gold's share price until the deal is locked in.
Oklo's board backing the acquisition
The target's board is backing the takeover in the absence of a better offer and is encouraging shareholders to accept the deal. The ASX miner pointed out that B2Gold is paying a large premium for the West African gold junior.
The offer price is a 127% premium to the last traded price on 25 May and 103% above the 30-day volume weighted average price.
Jewel in the crown
What the bidder gains is optionality over Oklo's high grade Dandoko Project in Mali. Dandoko is located east of the prolific Senegal-Mali Shear Zone. It's close in proximity to numerous world-class gold operations.
Oklo reported that an initial Measured, Indicated and Inferred JORC 2012 compliant resource of 11.3Mt at 1.83g/t gold for 668.5kOz contained gold encompassing the Seko, Koko, Disse and Diabarou deposits. These deposits remain open and are expected to grow with ongoing drilling either along strike or at depth.
More about the $90 million takeover bid
The offer from B2Gold implies a $135 per ounce of gold acquisition price. Oklo's board has also reminded shareholders they can still participate in the upside as they will own some of B2Gold's Toronto-listed shares.
Oklo's managing director, Simon Taylor, commented:
The B2Gold proposal was welcomed by the Oklo Directors and comes at an opportune time for Oklo shareholders to crystalise value and de-risk their investment in the Company.
Whilst the Oklo team continues to see significant potential in the Dandoko Project and the region generally, Dandoko is at an inflection point and this transaction removes the risks associated with project development, future capital raisings and other risks faced by a junior gold explorer in a foreign jurisdiction.
The takeover will be done via a scheme of arrangement and is subject to Oklo shareholders' approval. The scheme is also subject to other customary conditions.
While the Oklo share price has surged today, the explorer has only gained 1.4% in value over the past year.
