Panoramic Resources Says No Thanks to Independence Group Take Over

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THE BOURSE WHISPERER: Independence Group (ASX: IGO) rattled the boards of the ASX in November when it declared its intention to make an off-market takeover offer to acquire all of the ordinary shares of Panoramic Resources (ASX: PAN) it does not already own.

At the date of the announcement, Independence Group’s interest in Panoramic consisted approximately 24.9 million shares, representing approximately 3.8 per cent of the target company’s total issued capital.

IGO explained it opted to directly engage Panoramic shareholders following a number of unsuccessful attempts to engage with the Panoramic Board on a change of control transaction.

The company cited Panoramic’s recent operational performance and the lack of engagement from Panoramic’s Board to date as the impetus behind the offer.

The conditions to the offer include a number of conditions that IGO believes to be necessary to confirm the current status of operating performance at Savannah.

The offer is in the form of one IGO Share for every 13 Panoramic shares held, giving Panoramic a share price of 47.6 cents per Panoramic share, which values the company at around $312 million.

IGO indicated its preference is to conduct an expedited and thorough due diligence process, and to proceed with a recommendation from the Panoramic Board rather than seek the confirmations required under the offer conditions, however IGO said it is prepared to see the offer to completion should the offer conditions be satisfied.

“The Offer represents a rare instance of genuine and obvious mutual benefit for both Panoramic and IGO shareholders,” Independence Group managing director and CEO Peter Bradford said in the company’s announcement to the Australian Securities Exchange.

“Panoramic shareholders will be able to crystallise future value from Savannah at a very attractive price and retain exposure to its upside potential, while also gaining exposure to Nova and Tropicana and IGO’s extensive portfolio of belt-scale exploration projects prospective for nickel and copper.

“The company remains leveraged to the nickel market and we believe IGO has the financial, operational and technical capability to fully unlock value from Savannah and Panoramic’s exploration portfolio.

“Given our unique positioning as Australia’s largest independent producer of nickel, to unlock value at Savannah, we have decided to provide the offer for the consideration of all Panoramic shareholders.”

In response, Panoramic did nothing to surprise anybody by recommending its shareholders take no action in relation to the IGO takeover offer.

“The Board will evaluate the offer and Independence Group’s Bidder’s Statement and provide shareholders with a recommendation in due course,” Panoramic Resources said.

“Until then, shareholders should take no action.”

And no action they did take.

The Directors of Panoramic bounced back this week to inform their shareholders that they didn’t think the offer from IGO was in their best interests.

They recommended that having carefully considered the terms and conditions of the IGO Takeover Offer and taking into account the results of the company’s recently announced operational review at Savannah and other information available to them at the current time, shareholders should REJECT the IGO Takeover Offer.

They must have been serious because the recommendation was in capital letters.

The key reasons for the Panoramic Board’s unanimous recommendation were:

The IGO Takeover Offer is opportunistically timed, which could deprive Panoramic shareholders of future potential value;

Panoramic shareholders’ exposure to the company’s assets and potential upside would be diluted through accepting the IGO Takeover Offer;

Panoramic shareholders’ nickel exposure would be diluted through accepting the IGO Takeover Offer;

The IGO Takeover Offer consideration was for IGO shares, which PAN considered, based on several objective measures, to appear to be trading at an elevated valuation, presenting downside risk to the implied IGO Takeover Offer value;

Accepting the IGO Takeover Offer meant shareholders risk missing out if a superior offer from a third party if it emerges;

Panoramic’s largest shareholder, Zeta Resources, which holds 35.17 per cent of Panoramic indicated it does not intend to accept the IGO Takeover Offer; and

The IGO Takeover Offer is highly conditional and there is no certainty it will proceed.

In response, Independence Group said it would not be taking up the offer to use its 38 per cent holding to participate in Panoramic’s announced non-renounceable entitlement offer to raise approximately $31 million stating the Entitlement Offer breaches a condition of IGO’s takeover offer.

We can only assume this is not the end of this discussion.

 

 

Middle Island Resources’ Bid for Alto Metals Hits the Wall

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THE BOURSE WHISPERER: To quote The Eagles, “It seems like a dream now, it was so long ago”, but it was only in March this year the Middle Island Resources (ASX: MDI) provided Alto Metals (ASX: AME) shareholders something to ponder by announcing its intention of an all scrip off‐market take‐over offer for all the issued ordinary shares of Alto Metals.

Back then, Middle Island Resources said it had formed the view that the combination of the assets of the two companies would create, among other material benefits to the shareholders, a company with near-term cash flow potential and considerable production and exploration upside.

The company said the all scrip off-market takeover offer would give Alto shareholders five Middle Island ordinary shares for each Alto ordinary share, which the hunter said valued its prey at approximately $9.4 million representing a 61 per cent premium over Alto’s last closing price at the time.

According to Middle Island this upside would include access to its processing plant, even though it is currently on care and maintenance, saying this would provide Alto shareholders with an immediate, proximal and cost-effective processing solution for their company’s gold resources that is not otherwise available.

Middle Island is keen to restart its Sandstone gold processing plant and clearly the Alto deposits would provide initial mill feed and critical mass to support its early recommissioning in conjunction with the former’s Two Mile Hill deposits.

Middle Island declared it has received indicative broker support with respect to the takeover for an equity capital raising of approximately $5 million in additional funds to advance the feasibility and recommissioning of the Sandstone plant. Claiming the combination of Middle Island and Alto will consolidate the entire Sandstone greenstone belt and dataset under a single entity.

“Middle Island’s offer is compelling for Alto shareholders, who will receive a significant premium based on the last closing price for their shares and will benefit in the future growth potential of the proposed Combined Group,” Middle Island Resources managing director Rick Yeates said in the company’s announcement to the Australian Securities Exchange.

“Middle Island will integrate Alto’s assets with Middle Island’s Sandstone gold project, and immediately embark on an updated feasibility study, incorporating Alto’s Mineral Resources, to determine the economics of recommissioning the Sandstone gold processing plant.

“The collective Middle Island‐Alto gold assets offer a substantial growth opportunity for current and future shareholders of the Combined Group, via low capital intensity and a near-term production profile.

“The further potential is to significantly extend this production profile via Middle Island’s Two Mile Hill underground deposits, consolidate further proximal deposits within a 100 kilometre radius, and amalgamate an entire greenstone belt offering significant resource and exploration upside.

“In the view of the Middle Island directors, the premium offered, the funding support, Middle Island’s technical and management expertise, and participation in the combined Middle Island‐Alto upside, makes the bid a compelling proposal.”

The Resources Roadhouse spoke to Rick Yeats when both attended the RIU Resources Roadshow in Melbourne.

The deal, howver, failed to gain traction and Middle Island this week announced its off-market takeover bid for fully paid ordinary shares Alto Metals has lapsed.

The reason being that Middle Island’s 50 per cent minimum acceptance condition, to which the Offer was subject, had not been met as of close of the Offer period at 5.00pm (Perth time), Friday, 29 November 2019.

Middle Island thanked those Alto shareholders who had taken up the offer, acknowledging that as the offer had lapsed, they would have their Alto shares returned.

Undeterred, Middle Island said it strongly believes that combining Middle Island and Alto’s gold assets offers a substantial growth opportunity for current and future shareholders of a combined entity.

The company declared the combined entity would have low start-up costs and near-term gold production, utilising Middle Island’s existing Sandstone gold processing plant and infrastructure, along with the consolidation of healthy gold resource upside and exploration potential within the combined entity’s highly complementary tenure.

Middle Island made note that over the past two years, it has unsuccessfully endeavoured to engage the Alto Board on what it considers is a clear, compelling and commercially logical strategy that is widely endorsed by all stakeholders.

Middle Island indicated it intends to continue to pursue meaningful dialogue with the Alto Board of Directors as it seeks to add value for both Alto and MDI shareholders.

 

 

THE DAILY ROADHOUSE

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Breaker Resources Launches Bombora Drill Campaign

THE DRILL SERGEANT: Breaker Resources (ASX: BRB) has commenced a major reverse circulation (RC) and diamond drilling program designed to grow the one million-ounce Bombora Resource within the company’s Lake Roe gold project, east of Kalgoorlie in Western Australia.

Ausgold Commences RC Drilling at Katanning

THE DRILL SERGEANT: Ausgold Limited (ASX: AUC) is spending its recently-raised $2.4 million on an exploration drilling program at the company’s 100 per cent-owned Katanning gold project in Western Australia.

Auroch Minerals Historic Review Highlights Nickel Potential

THE DRILL SERGEANT: Auroch Minerals (ASX: AOU) completed a review of historic data that it claims has confirmed thick high-grade massive nickel sulphide mineralisation at the company’s recently-acquired Leinster project in Western Australia.

Marenica Energy Widens Koppies 2 Palaeochannel

THE DRILL SERGEANT: Marenica Energy (ASX: MEY) has completed a Phase 3 reverse circulation (RC) drilling program to extend the width of the palaeochannel on the company’s Koppies tenement in Namibia, Africa.

Renascor Resources to Raise $1.4 Million to Advance Siviour Development

THE BOURSE WHISPERER: Renascor Resources (ASX: RNU) has received firm commitments to raise $1.4 million to fund the advancement of the company’s Siviour graphite project near the coast of South Australia’s Eyre Peninsula.

Breaker Resources Launches Bombora Drill Campaign

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THE DRILL SERGEANT: Breaker Resources (ASX: BRB) has commenced a major reverse circulation (RC) and diamond drilling program designed to grow the one million-ounce Bombora Resource within the company’s Lake Roe gold project, east of Kalgoorlie in Western Australia.

Breaker Resources indicated the main focus of the drilling will be on extensions and discovery outside the Resource envelope, both along strike and at depth.

Drilling is expected to continue throughout 2020, using at least three drill rigs.

Diamond drilling at Bombora South has already commenced to extend the 3.2km-long gold system to the south.

The initial objective of the drilling is to discover and extend the main mineralised structures (faults) controlling the gold mineralisation observed at Bombora, prior to follow-up resource drilling.

RC and diamond drilling to be carried out at Claypan will test a 2.5km by 500m gold anomaly identified by recent aircore drilling 1.3km southeast of Bombora.

Breaker explained the Claypan anomaly is partially coincident with a newly identified, Bombora Sill-like quartz dolerite and has a geochemical signature comparable with that associated with the Bombora and Crescent primary discoveries.

As with Bombora South, the initial objective is discovery and to pin down the main structures controlling the mineralisation to guide further drilling.

The diamond and RC drill rigs will continue through to just before Christmas and then resume early in the New Year.

A third diamond drill rig will start early in the New Year to commence targeting the down-plunge extensions of the Tura, Daisy and Mindil lodes below the current Resource where reconaissance drilling has previously identified high-grade gold mineralisation.

The initial hole in this area will be a deep (~1,200m) diamond drill hole at the southern end of the Bombora deposit and will be conducted as part of a Department of Mines, Industry Regulation and Safety’s Exploration Incentive Scheme (EIS) co-funded drilling program.

“The drilling campaign was designed to accelerate the unlocking of the immense exploration potential at Lake Roe,” Breaker Resources executive chairman Tom Sanders said in the company’s announcement to the Australian Securities Exchange.

“Our team has done a great job unravelling the geology and believes there is huge scope to grow the one million ounce Resource based on a good understanding of the geology after 225,000 metres of drilling and detailed modelling.

“We are now applying this understanding outside the 3.2 kilometre Resource area to the rest of the 8.5 kilometre mineralisation system.

“The targets are a mix of prospects, some of which have already yielded strong reconnaissance intersections but which are poorly understood and inadequately drilled due to the early focus on Bombora (Bombora South, Bombora Deeps, Crescent).

“Other targets have compelling geochemistry with significant aircore drilling intersections that elevate the probability of fresh discovery (Claypan, Claypan North).

“I think this will translate into cost-effective extensional ounces and further discovery but it is now time to let the drill bit do the talking.

“The business case for our strategy is sound and simple.

“Our discovery cost at Bombora is approximately $18 per ounce…and the market is valuing resource ounces like ours at around $65 per ounce, rising to over $250 per ounce in many cases as projects develop.

“We believe drilling to expand the resource base is likely to add significant value and expand our development options.”

 

Email: breaker@breakerresources.com.au

Web: www.breakerresources.com.au

 

Ausgold Commences RC Drilling at Katanning

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THE DRILL SERGEANT: Ausgold Limited (ASX: AUC) is spending its recently-raised $2.4 million on an exploration drilling program at the company’s 100 per cent-owned Katanning gold project in Western Australia.

Ausgold has kicked off the program with the drilling of 20 Reverse Circulation (RC) holes for 2,500m, which it expects to be completed during December.

The new drilling within the Central Zone will target extensions to recently identified high-grade gold mineralisation intercepted at the Jinkas South and Jackson areas.

High-grade gold mineralisation was intersected at Jinkas South by previous drilling beyond the limits of the current Resource.

The Jackson area is located at the north western portion of the Central Zone and has also ceded high-grade intercepts in earlier campaigns.

“Following the recent announcement of the receipt of binding commitments for $2.4 million to institutional and sophisticated investors, Ausgold is immediately commencing an RC drill program which targets high-grade mineralisation within the Central Zone,” Ausgold managing director Matthew Greentree said in the company’s announcement to the Australian Securities Exchange.

“This round of drilling will test new geological concepts which aim to extend high-grade mineralisation with the potential to add high-grade ounces to the current the 1.2 million ounce gold Resource at Katanning.

“The results of this initial drill program will be used to prioritise targets for a larger drill program planned in 2020.

“In addition to these near Resource targets, Ausgold is targeting mineralisation in nearby identified areas such as the Burong and Cleggs Bend prospects, which are located within five kilometres of the main Resource.

“This suggests there is potential for significant further gold Resources to be discovered.

“We’re looking forward to updating the market in the coming weeks with the results.”

 

Email: info@ausgoldlimited.com

Web: www.ausgoldlimited.com

 

Auroch Minerals Historic Review Highlights Nickel Potential

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THE DRILL SERGEANT: Auroch Minerals (ASX: AOU) completed a review of historic data that it claims has confirmed thick high-grade massive nickel sulphide mineralisation at the company’s recently-acquired Leinster project in Western Australia.

Auroch Minerals said the review involved recalculation of important intersections for all historic drill-holes undertaken at the Horn prospect, several of which demonstrated thick zones of high-grade nickel sulphide mineralisation, including:

08BWDD0015
14.66 metres at 2.19 per cent nickel, 0.48 per cent copper and 0.12 per cent cobalt from 132.6m down-hole;

08BWDD0039
7m at 2.58 per cent nickel, 0.63 per cent copper and 0.14 per cent cobalt from 158.6m down-hole; and

08BWDD0074
10.8m at 2.21 per cent nickel, 0.53 per cent copper and 0.12 per cent cobalt from 143.97m down-hole.

Reviewing the modelled mineralisation in long-section at the Horn prospect demonstrated that thick high-grade nickel mineralisation occurs at relatively-shallow depths, and remains open along strike and down plunge.

Auroch had reprocessing of the high-resolution aeromagnetic data at the Leinster project completed by Southern Geoscience Consultants (SGC) that showed a strong correlation between the known nickel sulphide mineralisation and magnetic highs.

The company now has interpretation and modelling of the reprocessed data underway.

SGC has also commenced reprocessing and modelling of the large amount of down-hole electromagnetic (DHEM) data and surface moving-loop EM (MLEM) data at both the Horn and Valdez target areas of the Leinster project, in order to confirm the conductivity and location of the modelled EM plates that will be the focus of an RC drilling program to be carried out early in 2020.

“Our review of the large historical geological database from the Leinster project has demonstrated thick zones of massive nickel sulphide mineralisation within prospective ultramafic lithologies,” Auroch Minerals managing director Aidan Platel said in the company’s announcement to the Australian Securities Exchange.

“Reprocessing the detailed aeromagnetic data has provided insight into the known nickel sulphide mineralisation and hence confirmed the importance of aeromagnetic data when targeting komatiitic nickel sulphide mineralisation.

“We look forward to receiving the reprocessed EM data from SGC which will form the basis of our targeting for the RC drilling program planned for early 2020.

“The known mineralisation at the Horn provides an excellent base to build on, whilst the strong EM conductor in prospective lithologies at Valdez provides an excellent target for a potential new nickel sulphide discovery in close proximity to existing processing infrastructure.”

 

Email: admin@aurochminerals.com

Web: www.aurochminerals.com

 

Marenica Energy Widens Koppies 2 Palaeochannel

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THE DRILL SERGEANT: Marenica Energy (ASX: MEY) has completed a Phase 3 reverse circulation (RC) drilling program to extend the width of the palaeochannel on the company’s Koppies tenement in Namibia, Africa.

Marenica Energy reported the recent drilling had identified the Koppies 2 palaeochannel to be up to 1.2 kilometres wide, extending to now encompass the full width of the tenement, being approximately 3.6km.

The company explained the importance of the resulting wider channel width, saying that the wider the mineralised palaeochannel the greater the potential for increased numbers contained uranium pounds in any given length.

The palaeochannel was identified through the drill holes intersecting calcrete hosted mineralisation, which is the rock type within palaeochannels Marenica is targeting.

“Identifying that the Koppies 2 palaeochannel has a width of approximately 1.2 kilometres is fantastic news, especially with a length of at least 3.6 kilometres,” Marenica Energy managing director Murray Hill said in the company’s announcement to the Australian Securities Exchange.

“The substantial width is expected to greatly increase the contained uranium pounds per unit length of palaeochannel, which is extremely positive for the potential economics of the Koppies project.

“The Koppies story continues to develop, with the extensive Koppies 2 palaeochannel, excellent grades achieved from Phase 2 drilling, and with only approximately 10 per cent of the Koppies tenement explored, let alone the remaining 2,494 square kilometres of tenements held by the Company in the Namib area.”

Mrenica followed its Phase 2 drill program, which had identified a mineralised palaeochannel at Koppies 2, with three HLEM survey lines across the Koppies 2 palaeochannel that were designed to determine the potential width of the palaeochannel ahead of the Phase 3 drill program.

The HLEM results indicated a more extensive palaeochannel than expected, which resulted in the drill program being expanded, extending further north and south than initially planned.

Following from the identification of a wide palaeochannel at Koppies 2 and confirmation that HLEM has been successful in locating palaeochannels at Koppies, the company indicated it would continue with the exploration program.

Receipt of the assay results from the Phase 3 drill program is expected in January 2020.

 

Web: www.marenicaenergy.com.au

 

Renascor Resources to Raise $1.4 Million to Advance Siviour Development

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THE BOURSE WHISPERER: Renascor Resources (ASX: RNU) has received firm commitments to raise $1.4 million to fund the advancement of the company’s Siviour graphite project near the coast of South Australia’s Eyre Peninsula.

Renascor Resources said the placement will be completed by the issue up of just over 125.7 million shares at 1.1 cents per share.

“Following the successful completion of the Siviour Definitive Feasibility Study, Renascor is poised to advance key workstreams for the Siviour graphite project,” Renascor Resources managing director David Christensen said in the company’s announcement to the Australian Securities Exchange.

“Completing the combination of bulk samples for marketing purposes, FEED work, engaging with potential debt financiers, and executing binding offtake agreements will further de-risk the project and draw Siviour closer to commencement of construction during 2020.”

The company also announced a Share Purchase Plan (SPP) for all eligible shareholders to raise up to $0.5 million at the same issue price as the placement.

 

Email: info@renascor.com.au

Web: www.renascor.com.au

 

THE DAILY ROADHOUSE

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Gold Road Estimates New Wholly-Owned Yamarna Gold Resources

THE DRILL SERGEANT: Gold Road Resources (ASX: GOR) reported the first 100 per cent company‐owned resource addition since it entered the Gruyere Joint Venture.

Encounter Resources Identifies New Copper-Gold Drill Targets at Lamil

THE DRILL SERGEANT: Encounter Resources (ASX: ENR) recently completed IP and AEM surveys at the company’s 100 per cent-owned Lamil copper-gold project in the Paterson Province of Western Australia.

 

Gold Road Estimates New Wholly-Owned Yamarna Gold Resources

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THE DRILL SERGEANT: Gold Road Resources (ASX: GOR) reported the first 100 per cent company‐owned resource addition since it entered the Gruyere Joint Venture.

The Mineral Resource of 3.5 million tonnes at 2.62 grams per tonne gold for 297,600 ounces was estimated at the Gilmour and Renegade deposits, both 100 per cent-owned by Gold Road.

The Gilmour Maiden Mineral Resource totals 2.6 million tonnes at 3.09g/t gold for 258,400 ounces, with 0.8 million tonnes at 5.2g/t gold for 120,000 ounces, or 46 per cent of contained ounces, classified as an Indicated Resource.

This makes Gilmour the third largest and second highest grade deposit so far discovered on the Yamarna Belt.

The Gilmour Maiden Mineral Resource is located 55 kilometres, by road, south of the Gruyere Mine, which means the open pit and underground Mineral Resources could be developed by Gold Road and processed at Gruyere via toll treatment provisions under the Gruyere JV agreement.

The Gruyere development option provides a pathway to monetise the discovery and realise value from Gold Road’s exploration program.

The Renegade deposit, previously reported as Khan North, has been re‐estimated as an Inferred Mineral Resource of 0.9 million tonnes at 1.3g/t gold for 39,200 ounces.

The new resource estimate follows detailed geological interpretation and optimisation for open pit extraction, applying appropriate modifying factors and a gold price assumption of $1,850 per ounce.

Renegade is located just 35 kilometres by road from the Gruyere Mill, and is adjacent to the Gruyere Main Access Road.

Like Gilmour, Renegade could also potentially add value to Gold Road through toll treatment in accordance with the terms of the Gruyere JV agreement.

“The Maiden Mineral Resource for Gilmour represents the first gold deposit identified at Yamarna outside of the original discoveries on the Golden Highway, and our Gruyere discovery which is now being mined in Joint Venture with Gold Fields,” Gold Road executive director ‐ exploration & growth Justin Osborne said in the company’s announcement to the Australian Securities Exchange.

“The significance in being the third largest, and second highest grade deposit so far discovered at Yamarna is considerable.

“The relatively high‐grade demonstrates a diverse endowment consistent with our belief in the Belt having potential to host multiple deposits varying in style, size and grade as seen in other major Greenstone Belts in Western Australia ‐ the main difference at Yamarna is it remains significantly underexplored.

“We are now applying the improved understanding from our Gilmour exploration programme to assist our ongoing targeting of greater than one million ounce deposits on the considerable Yamarna tenement holding.”

 

Email: perth@goldroad.com.au

Web: www.goldroad.com.au