Westgold appears to wave white flag in Musgrave takeover battle

afr.com:

Westgold Resources appears to have no appetite for a bidding war with gold miner Ramelius Resources over explorer Musgrave Minerals, which boasts a high-grade deposit close to both producers’ existing operations in Western Australia.

Westgold said on Tuesday it was not budging on its takeover offer for Musgrave Minerals in response to what the Musgrave board considers a superior offer from Ramelius.

Westgold says it is not upping its takeover offer for Musgrave Minerals. Jason South

The Ramelius bid was announced to the market on Monday, a week after the Musgrave board branded Westgold’s all-scrip offer opportunistic and knocked it back.

Shares of Westgold advanced 2.9 per cent to $1.62 on Tuesday, and Musgrave 3 per cent to 34¢. Ramelius jumped 6.4 per cent to $1.33.

Ramelius and Westgold have mining and processing assets in the Murchison region and are keen to get their hands on Musgrave’s Cue project, slated to produce 337,000 ounces of gold over five years in stage one of its development.

Westgold said on Tuesday that it did not intend to improve its 1-for-5.37 all-scrip offer for Musgrave, which is due to close on July 24.

The Musgrave board and major shareholder Westminex, which has a 9.7 per cent stake, have backed the higher Ramelius scrip-and-cash offer which values Musgrave at $201 million.

The Ramelius offer comprises a 1-for-4.21 scrip component and an additional 4¢ in cash for every Musgrave share. Musgrave’s Cue project is within 40 kilometres of Ramelius’ operations at Mount Magnet, while Westgold also has processing assets nearby.

The Westgold stance comes after the battle between Kerry Stokes-backed Genesis Minerals and Silver Lake Resources for control of St Barbara’s flagship Gwalia gold mine near