Shandong Gold Mining offers to acquire Cardinal Resources for $221m

Shandong Gold Mining, a Chinese state-owned gold mining company, has offered to acquire Cardinal Resources, a West African gold‐focused exploration and development company, for about AUD321 million ($221 million) in cash.

In this connection, the two gold mining companies have entered into a bid implementation agreement as per which Shandong Gold Mining has offered a price of AUD0.6 per share of the Australian company.

Currently, Cardinal Resources owns interests in certain tenements within Ghana and is focused on developing the Namdini Gold Project in the West African country. As per the results of a feasibility study released in October 2019, the Namdini Gold Project has gold ore reserve of 5.1 Moz, which includes 0.4 Moz proved and 4.7 Moz probable.

Li Guohong – Shandong Gold Chairman said: “We have tremendous respect for the Cardinal organization for the manner in which it has advance Namdini to its current development status. We are conscious of the strong working relationship Cardinal has developed with its local Ghanaian community over many years and how important the development of Namdini is to both the local community and to the country of Ghana.

“We look forward to continue to build on this close relationship for the benefit of all stakeholders of the Namdini Project.”

Shandong Gold Mining proposes to acquire Cardinal Resources for $221m. Photo courtesy of Khusen Rustamov from Pixabay.

The board of directors of Cardinal Resources said that it is exploring various potential deals to maximise value for shareholders and considers that the offer from Shandong Gold is the best for shareholders, in the absence of a superior proposal, besides giving several key benefits to them.

Archie Koimtsidis – Cardinal Resources CEO and Managing Director said: “The Board of Directors of Cardinal has negotiated what we consider a strong offer for our shareholders and one which delivers a significant premium to Cardinal’s market price, at a time of considerable volatility and uncertainty in global markets.

“This is an opportunity for shareholders to crystalize their investment in Cardinal at an attractive price, and I am pleased that Shandong Gold is committed to getting on with development of Namdini to establish the first long-life gold mine in the Upper East Region of Ghana, bringing many significant and long-lasting benefits to the local community and Ghana.”

The acquisition will be subject to review of the Australian Foreign Investment Review Board and regulatory approvals in China.

For Cardinal Resources, Maxit Capital, BMO Capital Markets, Hartleys, and Canaccord Genuity served as joint financial advisers. The legal advisers for the Australian gold mining company are HopgoodGanim Lawyers (Australia) and Bennett Jones.