Tanzania-based miner Saturn Resources acquired the East Africa-focused Shanta Gold (LON: SHG) in a takeover bid of £141.95 million (USD$180.7 million).
The deal was announced on Wednesday. The takeover gives 13.5 pence a share, which represents a 6.7 per cent premium to Tuesday’s closing price of 12.65 pence.
Saturn Resources is part of ETC Holdings. The company said the deal came as the valuation of publicly listed gold companies has de-rated. According to the company, U.K-listed African gold miners are trading over 40 per cent down on a Price to Net Asset Value basis than five years ago.
“Whilst the independent Shanta directors have confidence in Shanta’s ability to deliver on its business plan and to continue to deliver strong results and growth in the future,” the company said in a statement, “this is an all-cash offer at a premium to the current price when the gold price is close to an all-time high.
“As such, it provides an exit opportunity in cash for all shareholders taking into account the current gold price as well as the operational and other risks inherent in the business.”
The Independent Directors of Shanta Gold announce that they intend to recommend an all cash offer by Saturn Resources at 13.50p per share.
The full announcement can be accessed here: https://t.co/oAFEIQMXON
— Shanta Gold (@shanta_gold) December 20, 2023
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Previous takeover attempts didn’t materialize
Shandong Gold (HKG: 1787), Chaarat Gold (LON: CGH) and Yintai Gold (SHE: 000975) previously approached Shanta for a takeover deal, but the company didn’t move forward.
Shanta operates the New Luika and the Singida mines in Tanzania. It also operates a project in West Kenya which is among Africa’s highest-grading gold assets.
Singida represents a significant milestone as the first commercial-scale gold mine constructed in the country in the past decade. The mine successfully commenced gold pouring in March, meeting its scheduled timeline precisely. Subsequently, it was officially declared to be in commercial production on June 1.
