AFTER launching a $193m takeover bid late in August, Northern Star Resources (ASX: NST) has closed the deal to acquire the controlling interest of explorer Echo Resources (ASX: EAR).
As Echo Resource’s major shareholder, Northern Star offered shareholders $0.33c per share in August (a 39.4pc premium on Echo’s volume weighted average at 19 August) to secure a controlling 59.3pc of Echo’s shares.
Echo Resources said the offer implies a fully diluted equity value of about $242.6m, with up to $193m payable by Northern Star for shares it does not already own, or the offer amount.
Echo’s Yandal gold project, located 400km north of Kalgoorlie and in close proximity to Northern Star’s Jundee operation, was at the centre of the takeover bid.
The project covers 1600sqkm and has a 1.8moz gold resource alongside the idle 1.8mozpa Bronzewing processing plant.
Northern Star chief financial officer Ryan Gurner and legal counsel and assistant company secretary Sarah Curnow have been appointed to the board of Echo, while all Echo directors with the exception of Alan Thom have tendered their resignation.
Echo managing director Victor Rajasooriar and all but one of the previous directors have left, with John Zimmerman being appointed interim chief executive.
“The Board of Echo is pleased to recommend the offer to Echo shareholders in the absence of a superior proposal, and we look forward to working with Northern Star to implement the transaction,” Mr Rajasooriar said.
