Bullabulling Gold’s (LON:BGL) board is refusing to budge over the bid from Norton Gold Fields and intends to raise funds to complete its infill drilling programme.
“The board is confident that, after the infill drilling programme has been completed, the majority of the current resource will be converted to a substantial maiden Mining Reserve,” it said in a statement.
“At that point, the company will be better placed to fund the completion of the Definitive Feasibility Study (DFS) on terms that reflect the true value of the company, and minimise shareholder dilution.”
Norton Gold, which is listed on the Australia exchange (ASX:NGF) and 82.43% owned by Chinese giant Zijin Mining, made a A7c per share cash offer in April.
A recent independent valuation by BDO Corporate Finance estimated Bullabulling’s value at between 11c and 16.1c with a preferred value of 14.6c (8.2p).
Today Bullabulling said it hopes to show a much higher value than even the independent report after completion of the drilling programme as it again urged shareholders to reject cash offer.
The directors said that while funding the development of the Bullabulling Gold project presents challenges in the current gold price environment, “This does not justify selling the company for well below its true worth to an opportunistic buyer”.
A DFS showing a viable project at Bullabulling would give it a number of funding alternatives, the statement added.
Shares rose 5% to 3.95p.
BAB Price at posting:
7.2¢ Sentiment: Buy Disclosure: Held
