Perseus Mining Limited (ASX/TSX: PRU)

Perseus Mining to acquire 100% of Exore Resources

Perseus Mining Limited (ASX/TSX: PRU) and Exore Resources Limited (ASX: ERX) on 3 June 2020 announced that they had entered into a Scheme Implementation Deed under which it was proposed that Perseus (or a subsidiary of Perseus) will acquire 100% of the issued share capital of Exore by way of a scheme of arrangement.

(Graphic Source – Company Reports)

Highlights

• Perseus to acquire 100% of Exore by way of a scheme of arrangement in an all-share transaction under which, if implemented, Exore shareholders will receive 1 Perseus share for every 12.79 Exore shares held 
• The Scheme delivers compelling value to Exore shareholders: 
  • Based on Perseus’s 10 trading day VWAP, Scheme Consideration values Exore at a fully diluted equity value of A$59.8 million1 or A$0.098 per share 
  • Based on Perseus’s last closing share price on 2 June 2020, Scheme Consideration values Exore at a fully diluted equity value of A$64.0 million1 or A$0.105 per share 
  • At Perseus’s last closing price, the Implied Scheme Consideration represents a premium of: 
  • 69% to Exore’s closing share price of A$0.062 on 2 June 2020 
  • 78% to the 20 trading day VWAP of Exore of A$0.059, up to and including 2 June 2020 
  • This is equivalent to a 56.9% premium based on the 20 trading day VWAP of both companies 
  • The Exore Board unanimously recommends that Exore shareholders vote in favour of the Scheme, in the absence of a superior proposal and subject to an Independent Expert’s report concluding that the Scheme is in the best interests of Exore shareholders 
  • Exore has elected to exercise its pre-emptive right over Apollo’s 20% joint venture interest in the Bagoe and Liberty Projects in northern Côte d’Ivoire for US$4.5 million to obtain 100% ownership 

 

(Chart source: TradingView)

• Shareholders of both Perseus and Exore are expected to benefit from the increased strength of the combined entity 

-Exore’s Bagoe project in northern Côte d’Ivoire has a maiden JORC-compliant Mineral Resource containing 90,000 ounces of gold classified as an Indicated Mineral Resource and a further 440,000 ounces classified as an Inferred Mineral Resource 

-The Mineral Resources defined at the Bagoe project are within trucking distance of Perseus’s Sissingué Gold Mine 

-Perseus has the financial capacity, technical expertise and in-country experience to advance the Bagoe and Liberty projects as well as explore Exore’s highly prospective ~2,000km2 land package 

• Perseus’s offer allows Exore shareholders to retain exposure to Exore’s exploration potential as well as gain exposure to Perseus’s multi-mine, multi-jurisdictional portfolio of profitable mining and development operations, its highly competent technical team and “licence to operate” in West Africa (Data Source – Company Reports)

 

Veye’s Take

Perseus is a multi-mine, multi-jurisdictional explorer, developer and producer of gold with a solid track record of successfully operating in West Africa. Perseus is on track to produce more than 500,000 ounces of gold per year with three mines in operation, generating a cash margin of more than US$400 per ounce from the financial year 2022. The acquisition of Exore results in Perseus gaining ownership of approximately 2,000 square kilometres of geologically prospective land in northern Côte d’Ivoire, close to its operating Sissingué Gold Mine. With the acquisition of Exore’s land package, including defined Mineral Resources at the Bagoe Project, Perseus has the option of developing the this into a new gold mine potentially using the Sissingué infrastructure. Or alternatively, delineating further Mineral Resources that can be economically mined and trucked to its Sissingué plant for processing. Either option provides an opportunity to continue creating value for Perseus’s shareholders. The stock is trading above 200MA and strong support at $1.16. Keeping it intact, the stock can have the potential of reaching much higher. “Buy” was given to “Perseus Mining Limited” at the price of $1.040 on 15 April 2020. It has already returned more than 12% in less than two months till now. Veye maintains a "Hold" on “Perseus Mining Limited” at the current price of $1.175