Aurum Resources has tightened its grip on fellow West African gold explorer Mako Gold, boasting an 86.77 per cent ownership stake and setting the stage for the final act.
Having already declared its off-market takeover bid as unconditional, Aurum has now upped the stakes by branding its offer “Best and Final,” signalling a determination to close the deal.
The company is proposing one Aurum share for every 25.1 Mako shares and is aiming to be done and dusted by the end of the month, encouraging remaining shareholders to accept the bid as soon as possible to avoid the risk of becoming minority investors in Mako.
Should Aurum’s holding cross the 90 per cent threshold at any time prior to the current end-of-month closing date however, the company has confirmed it intends to move to compulsory acquisition to mop up the remaining Mako shareholders and settle its offer on an accelerated basis.
Adding to the reasons for stragglers to accept the deal, Aurum says the independent directors of Mako Gold have thrown their full support behind the full and final bid. And since the company has crossed the 80 per cent ownership threshold, accepting shareholders may now also qualify for capital gains tax rollover relief.
With a majority of Mako board seats already secured, Aurum is preparing the road to a final merger, which when complete will provide all the benefits which flow from synergistic savings by removing multiple duplicated administrative and listing costs which, according to some fellow junior explorers can run to at least $1 million a year.
Only a week ago Aurum revealed a maiden resource of 1.6 million ounces grading 1 gram per tonne (g/t) gold at the company’s 100 per cent owned Boundiali project in northern Côte D’Ivoire. The speed of development at site has been truly astonishing, having only picked up the ground a little more than a year ago.
Aided by its own fleet of six diamond rigs, the company has been able to drill out a massive 63,927m within 14 months to deliver its latest numbers, but the new year promises to be no less busy with Aurum already aiming to almost double its drilling target to 100,000m for 2025.
A successful merger with Mako will add an additional 868,000 ounces of gold to the resource tally moving the company into the multi-million-ounce category with a combined resource base of just under 2.5 million ounces of gold.
The increased resource base will likely be particularly sweet for Aurum’s managing director Caigen Wang, who will be hoping to complete a rinse and repeat exercise by building Aurum into a replica of his previous, extremely successful endeavours in the region.
It was only five years ago that Wang, as managing director of former ASX-listed Tietto Minerals, applied for a mining licence over the Abujar gold project in northern Côte D’Ivoire. In the subsequent four years, the determined entrepreneur virtually rewrote the rule book on how to build a mine in Africa.
Wang managed to build a massive 3.8-million-ounce deposit at Tietto’s Abujar project producing 250,000 ounces of gold a year before eventually selling the company nine months ago to Hong Kong’s Zhaojin Mining for A$733 million price tag.
That’s not a bad result when you consider Wang floated Tietto just six years earlier in 2018 with a market cap just shy of $40m.
With gold prices soaring at US$2,658 (A$4,283) per ounce and significant exploration potential on the horizon, the soon-to-be-merged Aurum Resources looks primed for success.
And in another eerily familiar echo from the days of Tietto, Aurum is also backed by a sizable fleet of owner-operated rigs – with more on the way – to support plans for a huge drilling campaign in 2025. The merger certainly seems to set the stage for Aurum to potentially become a new major force in West African gold mining.
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By James Pearson
