Spartan suitor Ramelius tips in funds for raising BRIDGET CARTER...

Spartan suitor Ramelius tips in funds for raising
BRIDGET CARTER
2 hours ago.
Updated 43 minutes ago
The Australian Business Network



The activities of Spartan Resources are in the backyard of Ramelius Resources. Picture: David Gray/AFP

Ramelius Resources is participating in the equity raising of its takeover target Spartan Resources in a move that will take its interest in the company to 19.9 per cent, say sources.

Spartan entered a trading halt on Tuesday as it taps the market for $220m by way of a placement at $1.32 per share through Canaccord.

The price is a 7 per cent discount to its last closing price and the funds will be used for activities including its underground mine development and general exploration.

Should Ramelius opt to buy Spartan, it will need to pay a higher premium for its additional cash, although the cash would be its own once it purchased the company.

Ramelius purchased 8.9 per cent of Spartan Resources in June and it is also known to have been eyeing up other targets at a time it remains cashed up with the gold price hitting record highs this year.

Currently, the Ramelius market value is close to $2.4bn whereas Spartan’s market value is almost $1.6bn.

Shares last traded at $1.42, and some question whether the raise signals Spartan’s more eager to do its own acquisition rather than be bought by another group.

Ramelius Resources chief executive Mark Zeptner earlier said that the Spartan Resources project was “in our backyard”.

Ramelius is developing both the Rebecca-Roe project and Cue Gold Project, 35km north of Mt Magnet, after buying Apollo Consolidated in 2022 and Musgrave Minerals the following year.

It owns and operates two production and processing hubs at Mt Magnet and Edna May, in Western Australia.

Spartan owns the Dalgaranga Gold Project, 65km northwest of Mt Magnet in Murchison, where it also owns a gold processing hub.

Part of that is its Never Never high-grade gold deposit on which the company is pinning its hopes for growth.

Spartan was previously called Gascoyne Resources and collapsed after gold ore levels being processed through its mill were not profitable, and it was later recapitalised after its market value fell beneath $100m.

Ramelius purchased Spartan shares at 92c in June, and they are currently trading at about $1.33, while Ramelius shares are trading at $2.09.