Westgold-Karora Merger Inches Closer

Canadian miners dip on the back on tighter M&A rules

The Pre-Start

  • Ramelius responded to the takeover panel’s ruling, confirming that RMS is no longer in transaction discussions with WGX (RMS)

  • Emerald achieved record full-year production of c. 114koz at Okvau, with c. 28koz produced. EMR had cash & bullion of $152m at 30/6 (EMR)

  • Spartan released infill Never Never & Pepper assays, intercepting mineralisation at depth, ahead of its imminent resource update (SPR)

  • Strike Energy received EPA approval for the upstream infrastructure for the development of the West Erregulla gas field (STX)

  • Orion released the result of the first diamond hole at Okiep, hitting 43m at 3.41% Cu from 527m at Flat Mine South (ORN)

  • Lion Selection now holds 19.4% of gold developer Saturn Metals after the company’s recent $14m placement (STN)

  • Eagle Mountain said it had confirmed porphyry-style targets, adding it has appointed advisors following “unsolicited” approaches (EM2)

  • Ardea has commenced works on a DFS for the Kalgoorlie Nickel Project - Goongarrie Hub (ARL)

  • Global Lithium is in a trading halt pending Board changes (GL1)

  • Toubani said that Mali adopted the implementation decree of the 2023 mining code, indicating that administration could return to normal (TRE)

High Grade It

  • Ivanhoe produced over 100kt of copper in Q2 with first concentrate from the Phase 3 concentrator achieved in early June (IVN)

  • Rex MD described BHP as a “risk management” company after an Indonesian group launched a takeover for the copper-gold play (AFR)

  • Lundin Gold produced 133koz of gold in Q2 (LUG)

  • The Takovers Panel has given the $2.4b Westgold and Karora tie-up its blessing by waving away Ramelius’ protests (West)

  • A Westgold subsidiary will pay more than $400k after a worker’s arm was trapped in a conveyor at one of the gold producer’s plants (BN)

  • An expansion of S32’s Boddington Mine to feed the Worsley refinery for 15 more years has been backed by the EPA with conditions (West)

  • Dryblower reckons gold might be becoming “too hot to handle” (MiningNews)

  • Chinese alumina producers are boosting output to take advantage of the highest prices in more than two years (Bloomberg)

  • More shareholders in the failed Mallee, the Avebury owner, have voiced their view that FIRB should investigate the proposed sale (Advocate)

  • New Canadian rules limiting mining M&A will leave metals producers with lower valuations than global peers, say analysts (Bloomberg)

  • Shares of Canadian critical minerals groups fell on the TSX as investors assessed the potential impact of Canada's stricter policy (Reuters)

Wheelin’ n Dealin’

  • The Takeovers Panel declined to make a declaration of unacceptable circumstances in response to Ramelius’ attempt to agitate the Westgold-Karora tie up (RMS)

  • Proxy adviser ISS has advised clients that it recommends the merger between Westgold and Karora (WGX)

  • Silvercorp’s proposed C$200m takeover of Adventus Mining has stalled following litigation challenging the environmental licence (MW)

  • Diatreme is up to 72.7% of Metallica as its takeover offer progresses (DRX)

Rattlin’ the Tin

  • Magnet producer JL Mag made a $7m investment in Hastings, buying 9.8% of the company in newly issued stock (HAS)

  • New Talisman is raising up to NZ$8m through a rights offer (NTL)

Word on the Decline

  • We are led to believe Woodside is rolling out a round of lay-offs today. We aren’t sure how widespread they are or how many jobs are on the chopping block just yet…

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In the Weeds

  • An intriguing interview with Sebastian Mallaby, author of books on Alan Greenspan, the history of hedge funds as well as venture capital

  • A fantastic look through Australian business history by Robert Gottliebsen in the Australian

  • South Africa is open to deals – it’s all in the approach (AFR’s Chanticleer)

  • Battery maker LG Energy Solution second-quarter profit missed analyst estimates, as sales of electric vehicles continued to slow (Bloomberg)

  • Why nuclear power must be a part of the energy debate, an op-ed by Saul Kavonic (The Australian)

  • China’s Shandong province plans to develop a 100b yuan (US$14b) lithium battery industry by next year (Mining.com)

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Devil’s in the Detail

If you read the annexure of the Takeovers Panel declaration in relation to Ramelius’ application, you’ll see that Westgold and Karora agreed to amend some specific clauses of their agreement in relation to the Panel’s concerns on the non-solicitation provisions.

But what does this actually mean? The wording in the agreement around the non-solicitation clauses has been softened, such that Ramelius could now theoretically bid for Westgold. BUT, it appears the original termination clauses are still in place which practically make bidding implausible.

So it looks unlikely to us that Ramelius could make a corporate play for Westgold (or Karora) right now, especially in light of the recent Spartan action. But Never (say) Never…

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