Gascoyne Resources Ltd (ASX:GCY) has received notification from Westgold Resources Ltd of official withdrawal of the off-market takeover bid to acquire 100% of Gascoyne shares after receiving ASIC consent.
This follows Orders made by the Supreme Court of Western Australia approving Gascoyne’s Scheme of Arrangement for a merger with Firefly Resources Ltd, paving the way for the scheme to become effective.
Condition not satisfied
Westgold’s offer was conditional on, amongst other matters, the Firefly scheme not proceeding and as this has become effective, that condition cannot be satisfied.
In a letter to Gascoyne shareholders, Westgold stated: “Westgold is disappointed in not being able to deliver a superior outcome for the Gascoyne shareholders, particularly as approximately 50% of the shareholder base and the Gascoyne board agreed it was a superior offer to that agreed with the counterparty in the Firefly scheme.
“To that end, Westgold thanks the many Gascoyne holders who were prepared to become part of a significant, growth-oriented Australian gold producer and welcomes those who, separate to our offer, joined Westgold’s register during these recent weeks.”
Press on with endeavours
Gascoyne will now press on with its endeavours to gain maximum benefits from the Firefly scheme.
The company stated in a letter to shareholders earlier this week: “We recognise our obligation to now deliver on the strategic rationale and value uplift of the Firefly transaction to our shareholders.”
It also said: “Recent events serve to confirm the strategic value of the +2.5 million tonnes per annum Dalgaranga processing hub in the Murchison region.
“Since we recapitalised the business in 2020 our strategy has been to add value to the company by building our mining pipeline around this asset, targeting higher grade ore sources which have the potential to deliver higher profitability and a step-change in production.
“The Gascoyne board believes the combination with Firefly’s Yalgoo assets will help to deliver on this objective.”
Integration process
With the Firefly transaction set to complete, Gascoyne is well advanced in the integration process and expects to pass several milestones between now and the end of the March 2022 quarter.
These include:
- An update to the mineral resource estimate for the Melville deposit;
- Maiden mineral resource estimate for the Applecross deposit;
- A scoping study for the Melville deposit;
- Maiden ore reserve for Melville; and
- Submission of Mining Proposal for Melville.
The company said: “The developments all support the Updated Business Plan for Dalgaranga announced last month.
“In essence, we will be prioritising the introduction of regional deposits like Melville over a previously planned Stage 3 cutback of the Gilbey’s open pit. This will reduce waste stripping costs and improve short to mid-term cashflow.
“Our exploration program is also continuing in parallel with our mining activities. Over the next two quarters we are expecting results from the Hendricks, Greencock and Sly Fox targets at Dalgaranga.
“Results from previously completed drilling at Yalgoo are still outstanding and also expected in the coming weeks.
“Through the Firefly transaction, we have doubled our landholding in the Murchison region which increases our chance of discovery.
“We will continue to advance several near-surface deposits identified by Firefly including Don Bradman, Crescent and Brilliant, but will also expand our search across the broader tenement package which hasn’t yet been subject to a modern, systematic exploration program under one owner.”