Norton Goldfields makes takeover bid for Kalgoorlie Mining Company

THE BOURSE WHISPERER: Kalgoorlie Goldfields neighbours Norton Gold Fields (ASX: NGF) and Kalgoorlie Mining Company (ASX:KMC), have signed a Bid Implementation Deed (BID) pursuant under which Norton will make a friendly off-market takeover offer to acquire all Kalgoorlie Mining company shares.

The offer is for of 0.054 Norton shares and 0.054 Norton options (exercisable at 27 cents on or before 30 April 2015) for each Kalgoorlie Mining Company share.

“This transaction just makes good sense,” Norton Goldfields chief executive officer Dr Dianmin Chen said.

“It brings together complementary assets and will deliver greater production, cost efficiency and exploration upside for both companies, and their respective shareholders.

“Norton’s vision is to be a leading, long-term gold producer in Western Australia and the proposed acquisition of Kalgoorlie Mining Company is consistent with our strategy to reduce operating costs and increase production, both from our existing assets and by exploring opportunities for consolidation.

Kalgoorlie Mining Company’s key asset is the Bullant gold project, which is located 28 kilometres west of Norton’s 3.3 million tonnes per annum Paddington operations.

Bullant contains a Total Mineral Resource of 431,200 ounces (3.57 million tonnes at 3.76 grams per tonne gold) and Reserve of 40,366 ounces.

 

Bullant gold project – Total Mineral Resource Statement. Source: Norton announcement

 

Kalgoorlie Mining Company has identified a number of areas with potential to grow the existing resource.

“Norton’s offer provides Kalgoorlie Mining Company shareholders with an attractive premium, while giving them the opportunity to participate in the upside that exists in the combined company,” Kalgoorlie Mining Company managing director James Croser said.

“Norton’s experienced management team has the development and mine operation capabilities to maximise the value of Kalgoorlie Mining Company’s assets and bring them quickly and cost effectively into production.

“The offer will significantly reduce the risks shareholders face through an investment in a single mine company, with limited access to capital.

“Each Kalgoorlie Mining company director considers the offer to be in the best interests of shareholders and unanimously recommend the offer in the absence of a superior proposal.”

CONDITIONS OF THE OFFER

A Bid Implementation Deed was signed on 17 April 2013 and obliges NGF to make an off-market takeover offer for the entire issued share capital of Kalgoorlie Mining Company, subject to a number of conditions which include (but are not limited to):

(a) Norton and its subsidiaries obtaining a ‘relevant interest’ (as defined in the Corporations Act
2001 (Cth)) in at least 90 per cent of all the Shares;

(b) The Option Offer being declared free from all conditions;

(c) Each of the Unlisted Options being cancelled;

(d) Receipt of Foreign Investment Review Board (FIRB) approval and all necessary Chinese regulatory approvals;

(e) No material adverse change in relation to the Kalgoorlie Mining Company group;

In addition, NGF is obliged to make the Option Offer, which would be subject to the following conditions:

(f) Norton and its subsidiaries obtaining a ‘relevant interest’ (as defined in the Corporations Act
2001 (Cth)) in at least 90 per cent of all the Listed Options; and

(g) The Offer for Shares becoming unconditional.