Phoenix Gold (ASX:PXG) has received a formal off-market takeover offer from Zijin Mining Group Co., Ltd (SHA:601899, HKG:2899) of $0.10 cash per share, which values PXG at about $47 million.
Zijin received FIRB approval for the offer and will lodge a Bidder's Statement. Phoenix Gold last traded at $0.105.
Zijin has entered into a pre-bid agreement with major shareholder Geologic Resource Partners LLC, giving it a relevant interest of 17.9% in PXG.
Phoenix advised shareholders to take no action to the bid, noting that it is unsolicited and conditional – including that Zijin must acquire a relevant interest in at least 50.1% of PXG.
It also reiterated that it continues to engage with a number of parties to consider alternative, value maximising, proposals for Phoenix and its assets.
In addition, Evolution Mining (ASX:EVN) recently became the largest shareholder in PXG with a 19.8% stake after acquiring 49 million PXG shares at $0.12 each.
Dale Rogers, Phoenix executive chairman, said:
“The Directors of Phoenix will review the Bidder’s Statement and respond formally through a Target’s Statement in due course.
“Until the Phoenix Board provides shareholders with a formal recommendation we advise all shareholders to take no action.
“In assessing this, or any alternative proposals that may arise, the Board will focus on maximising Phoenix shareholder value.
“In this context, we will give consideration to our extensive tenement holdings on two world class shear zones in the Western Australian goldfields that sit alongside several gold camps and near established processing facilities, carrying significant strategic value for a number of parties in the region.”
Phoenix has commissioned BDO International to prepare an Independent Expert Report to determine whether the Zijin Offer is fair and reasonable.
The company's projects are located within 50 kilometres of Kalgoorlie-Boulder with resources of 4.02 million gold ounces, including a 1.16 million ounce reserve.
Priority drill targets have been defined and planned for 2015 on the Zuleika shear.
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