Ramelius Resources has committed to an early 2019 start for Edna May gold mine. Image: Ramelius Resources.
BY AMY BLOM
RAMELIUS Resources has its sights set on more gold, recently launching a takeover bid for junior explorer Explaurum and inking a deal to purchase Black Oak Minerals’ Marda project.
In early September, the miner launched an all scrip $59 million takeover bid for Explaurum, which owns the Tampia project, 140km south of its Edna May gold mine in WA.
Ramelius said it attempted to engage with the Explaurum board to “jointly explore a recommended deal”, but had not come to an agreement so decided to put its offer directly to shareholders. According to Ramelius managing director Mark Zeptner, there was clear logic in the combination of Explaurum’s assets with Ramelius’ WA operations.
“After the successful acquisition of Edna May last year, Ramelius is focussed on building on its growth strategy to extend mine life and maximise the value of existing infrastructure in its portfolio,” Mr Zeptner said.
“This compelling offer is the next step in that growth strategy and is expected to provide significant benefits to both Explaurum and Ramelius shareholders.”
Explaurum hit back just days later, telling the market the Ramelius bid was ”wholly inadequate”, and for shareholders to “take no action”.
According to Explaurum, the Ramelius offer grossly undervalued the Tampia gold project and was ill-timed.
Explaurum was expected to issue a target statement in mid-October with the directors’ recommendations to shareholders.
Days later, Ramelius also signed a binding agreement to acquire Black Oak Minerals’ Marda project for $13 million, which will act as a feed source for its recently acquired Edna May mine.
Mr Zeptner said the acquisition highlighted the strength of its team in identifying opportunities for incremental ore feed around its key mining hubs of Mt Magnet and Edna May.
“This has the potential for significantly enhancing future economics at the Edna May mine yet does not detract from our ability to execute strategic transactions in other jurisdictions,” he said.
The acquisition news came a week before Ramelius announced it would commit to underground mining at Edna May, beginning early next year.
The miner had been considering this option versus a $100 million cutback of the existing open pit.
Mr Zeptner said the decision to move down the underground path had not been taken lightly.
“After extensive studies and considering our future options around other potential ore sources in the area, we believe this is a prudent decision that will lead to exceptional future outcomes for our shareholders,” Mr Zeptner said.
