Alkane Resources Limited (ASX:ALK) has given notice to terminate its $8 million investment in Explaurum Ltd (ASX:EXU) after the latter’s board accepted an improved takeover off from Ramelius Resources Limited (ASX:RMS).
The share subscription agreement between Alkane and Explaurum represents a competing proposal to the accepted takeover.
In accordance with its rights under this agreement, Alkane has given notice of termination and requested that the $800,000 deposit be refunded and the $400,000 break fee paid.
The New South Wales gold producer and rare earths project developer intended to invest into Explaurum’s Tampia Gold Project in WA.
This investment was to be made through a placement of 66,666,675 ordinary Explaurum shares at an issue price of 12 cents per share, which would have given Alkane a 12.2% holding in Explaurum.
It formed part of Alkane’s strategy of investing in junior gold companies with projects that have passed due diligence review and Alkane’s investment criteria.
These criteria include high exploration potential as well as requiring near-term development funding.
Ramelius increased the consideration of its original offer by 2 cents cash per Explaurum share in addition to the existing consideration of 1 Ramelius share for every 4 Explaurum shares.