THE BOURSE WHISPERER: Orbis Gold (ASX: OBS) has received a conditional, non‐binding and indicative proposal from Canadian-based mining house SEMAFO Inc. to acquire 100 per cent of Orbis’ issued ordinary shares.
SEMAFO is offering cash consideration of between 62 cents to 65 cents per share – not a bad premium for the current 42 cents, which is the company’s highest share price.
SEMAFO operates the Mana Mine in Burkina Faso, which includes the high-grade Siou and Fofina deposits.
“There are no assurances that this approach will lead to an offer for the company or its assets being made, either now or in the future,” Orbis Gold said in its ASX announcement.
“The receipt of the Proposal follows a recent unsolicited approach by SEMAFO regarding a potential transaction.
“Following careful review and analysis of the Proposal, the Orbis Gold Board has unanimously determined the Proposal significantly undervalues Orbis Gold, both in terms of its existing assets, and the potential value the company expects to deliver to its shareholders in the near future.”
Orbis reminded everybody that it is currently updating the Scoping Study for the Natougou project following the announcement of an expanded Mineral Resource estimate in August.
The company said the results of this study are expected to be announced in the following days and intimated they could have a material impact on the valuation of the company.
“SEMAFO’s Proposal has been made prematurely ahead of the company’s imminent release of this update and with knowledge that the update was imminent,” Orbis continued.
“In the course of discussions leading to the Proposal, SEMAFO declined an invitation to conduct due diligence on Orbis Gold’s assets under Orbis Gold’s standard confidentiality terms and receive this updated scoping study data when made available.
“The invitation by Orbis Gold to conduct due diligence was made to give SEMAFO an opportunity to put forward a proposal that the Orbis Gold Board may have considered to be in the interests of shareholders.”
Orbis has advised its shareholders to keep their powder dry at this stage and take no action in regards to the offer.