Westgold moves on Gascoyne deal

Westgold Resources has submitted its bidder’s statement for Gascoyne Resources following a week of contention related to the multi-million-dollar takeover.

The statement was sent to Gascoyne and lodged with the Australian Securities and Investments Commission today.

Gascoyne’s board will have two weeks to review the statement before sending it to shareholders, who are due to vote on a separate merger deal with local explorer Firefly Resources on October 27 (recently rescheduled from October 21).

Westgold, in a recent submission to the Takeovers Panel, has requested the meeting be postponed to a further date so Gascoyne’s shareholders can review the alternate proposal.

Westgold is offering one of its shares for every four shares in Gascoyne, which values the target at roughly $123 million. It's also a 58 per cent premium to Gascoyne’s closing price on September 29, the day before Westgold told the market of its intentions.

Gascoyne’s board rejected the offer last week, having said it was inadequate and not superior to the planned merger with Firefly (announced in June).

Westgold takes the opposite view and has labelled the merger with Firefly “highly dilutive”.

It reiterated those claims in its bidder’s statement and noted its offer removed “significant funding and technical risks” associated with Gascoyne’s Dalgaranga operation in the Mid West, where mining is expected to continue until early 2025.

Westgold, which also operates in the region, said Gascoyne needed more capital to sustain its operations and fund its recently revised business plan.

Further, Westgold said the target’s share price could fall if the takeover offer was unsuccessful.

Gascoyne, which is seeking to consolidate Firefly’s Yalgoo project into the Dalgaranga operation, has told shareholders to take no action in relation to the Westgold proposal.

Gascoyne’s shares were up 3.9 per cent at 1:13pm AEDT to trade at 40 cents.

Westgold’s shares remain unchanged, trading at $1.98.