Westgold Resources to not increase Musgrave Minerals offer

Westgold Resources
Worker looking at a mining truck.

Westgold Resources (ASX:WGX) has decided not to increase its offer for the takeover of Musgrave Minerals (ASX:MGV) following a better offer from Ramelius Resources (ASX:RMS).

In early June, Westgold announced an all-scrip off-market takeover offer for all the outstanding shares in Musgrave Minerals with an implied value of $177.3m or 30¢ per share.

Musgrave shareholders were to receive one fully paid ordinary Westgold share for every 5.37 Musgrave shares held.

At the time, Westgold said the combination of the companies consolidates both groups’ regional assets into a larger scale, more profitable and highly investable WA-focused gold miner.

Westgold managing director Wayne Bramwell said the combination of Musgrave and Westgold would de-risk the development of Musgrave’s Cue gold project.

“The combination of Musgrave’s assets with our regional infrastructure and operating teams will fast track and de-risk the development of Musgrave’s Cue gold project and provides Musgrave shareholders immediate exposure to a much larger, established WA gold producer,” he said.

“The Westgold offer provides a logical, capital efficient and fast track solution that delivers immediate value to both Musgrave and Westgold shareholders and can rapidly enhance production scale and profitability of the combined group.”

A few days ago, Ramelius presented a $201m offer, comprising of 0.04¢ in cash per Musgrave share held and one Ramelius for every 4.21 Musgrave shares.

This offer implied a total undiluted equity value of $201m for Musgrave.

Ramelius managing director Robert Waugh said the company is pleased with the superior offer.

“We are confident that the Cue project be in good hands should the offer be successful and in the even that it does occur, we would look forward to seeing the project contribute to the ongoing success of Ramelius’ Mt Magnet operations,” he said.

Westgold’s offer will close on July 24, 2023 with any acceptances to be null and void.

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