Firm seeks alternatives

 COPPER-gold miner PanAust is seeking alternative takeover proposals after rejecting an initial non-binding off-market takeover bid from its major shareholder, PNG Industry News reported.

The company said the offer from China’s Guangdong Rising Assets Management (GRAM) was below the level at which the board would be prepared to recommend a takeover to its shareholders.

PanAust said the board had since agreed to allow GRAM to undertake due diligence to assist it in improving its offer but warned the same level of access would be extended to other bidders.

Chairman Garry Hounsell said: “On April 10, the board of PanAust received a confidential, non-binding, indicative and incomplete proposal from GRAM to acquire all of the shares in the company by way of an off-market takeover offer.

“GRAM became a cornerstone shareholder of PanAust in September 2009 by way of a placement and currently holds approximately 23% of PanAust’s issued capital.

“The initial indicative price of A$2.20 (K5.79) per share was subsequently raised to A$2.30 (K6.05) but GRAM has been advised by the PanAust board that this price is below the level at which the board would be prepared to recommend a takeover offer to shareholders,. 

“The board has agreed to allow GRAM to undertake due diligence, under a confidentiality agreement, to assist GRAM to improve its offer. 

“The board will seek alternative proposals and similar access to what has been afforded GRAM will be offered to other potential bidders. 

The meeting heard an update about the company’s agreement with Glencore to purchase an 80% interest in the Frieda River copper-gold project.

“This represents a great opportunity for the company and, while the purchase remains subject to a condition precedent, we expect the transaction will close during the September quarter. 

“Frieda River is one of the largest undeveloped copper-gold deposits in the world and together with our Inca de Oro project in Chile, will provide PanAust with significant resources and development optionality into the foreseeable future. 

“PanAust’s commitment to sustainable development is a key consideration in the way the company’s plans and undertakes its business activities and incorporates a strong emphasis on delivering sustainable benefits to the communities within the vicinity of its operations and along logistics and concentrate haulage transport routes.”

Hounsell said despite a year on year pay metal production and competitive costs materially lower metal prices had an adverse impact on the company’s financial performance when compared to 2012.