Auzex tells GGG – Cut the Bullabulling

THE BOURSE WHISPERER: AIM-listed GGG Resources has completed its listing on the ASX but not everybody is celebrating.

GGG Resources’ principal asset is its 50/50 joint venture with Auzex Resources at the 1,982,000 ounce gold JORC Inferred Resource Bullabulling gold project.

Bullabulling is located 65 kilometres south west of Kalgoorlie, Western Australia in the highly prospective Eastern Goldfields.

GGG Resources has made a takeover offer for Auzex, which hasn’t been received well by the joint venture partner.

GGG Resources managing director, Dr Jeffrey Malaihollo, said that he was very pleased to move forward with GGG Resources’ ASX listing, after successfully raising significant capital from the Australian market.

“The Bullabulling gold project as an asset continues to show exceptional promise, with a resource upgrade expected in the near future,” Malaihollo said.

“We’ve also successfully demonstrated our ability to source capital from both Australia and the United Kingdom to support the rapid advancement of Bullabulling.

“What the Bullabulling gold project clearly needs now is an aligned, like-minded single group of shareholders to push the project forward.”

The GGG sentiment doesn’t seemed to be shared by the board of Auzex Resources, which released its own announcement detailing feedback from Baker Steel Capital Managers, the largest shareholder of both Auzex and GGG, holding 9.3% and 10.2% respectively, indicating its intention to reject the takeover offer.

Baker Steel instead has urged both companies to work towards a friendly merger of the consolidation of the Bullabulling gold project.

“We welcome the support of Baker Steel and are confident Auzex has the support of other major institutional and retail shareholders to reject the takeover offer,” Auzex Resources managing director John Lawton said.

“We believe we have the ability to fast track development of the Bullabulling Gold Project in a highly professional manner for the benefit of all shareholders.

“Auzex remains open to discussions with GGG in relation to alternatives for the development of Bullabulling”

GGG upped the ante in its release stating, “Under the Bullabulling joint venture agreement, when Auzex Resources and GGG Resources jointly acquired 50% of the project, the parties agreed to appoint a manager to operate the Bullabulling gold project as soon as reasonably practicable.”

“Auzex has not subsequently acquired any management rights over the Bullabulling gold project under our joint venture agreement,” Malaihollo added.

“We consider any statement made by Auzex that it is the manager of the joint venture to be misleading.

“Rationalisation of the future decision-making processes in relation to the Bullabulling gold project along with consolidated ownership is one of the key strategic benefits that would arise should our offer for Auzex be successful.

“Now that GGG Resources is listed on the ASX, Auzex shareholders accepting the offer who become GGG Resources shareholders have the option of trading their shares via the ASX, which is a welcome development.”

Auzex has, unsurprisingly, encouraged its shareholders to reject the current offer, advising them to instead sit back and wait for further information as it comes to light.

“Your Board unanimously recommends that Auzex Shareholders REJECT the GGG offer and it is the directors’ intention to do the same for the shares that they hold,” Auzex said.

 “To reject the GGG offer, Auzex Shareholders should simply TAKE NO ACTION in relation to the GGG offer or communication from GGG.

“Auzex Target’s Statement will soon be released to the market, and distributed to shareholders.”