FED:Aragon advises no action on Westgold bid By Rebecca Le May...

FED:Aragon advises no action on Westgold bid

By Rebecca Le May
PERTH, Feb 7 AAP - Takeover target Aragon Resources Ltd has
advised its shareholders to take no action in relation to a $76
million all-scrip bid by fellow junior gold explorer Westgold
Resources Ltd.
After the proposal was announced, Aragon shares jumped 3.5
cents, or 14.58 per cent, to 27.5 cents, while shares in Westgold
fell three cents, or 9.23 per cent, to 29.5 cents.
"At this stage, shareholders should take no action," Aragon
chief executive Paul Benson said in a statement.
Westgold said the companies had held talks, and Aragon's board
would reserve its decision regarding its formal recommendation to
shareholders until it receives an independent expert's report on
the proposal.
Aragon has engaged BDO Australia Ltd as its independent expert
and Golder Associates Pty Ltd as its independent technical expert.
Westgold, which holds a 20.1 per cent stake in the target, said
it would offer one Westgold share for each Aragon share held, plus
one option for every Aragon option held.
Westgold said the offer represented a 35.4 per cent premium to
Aragon's closing share price on Friday of 24 cents.
Westgold spun off Aragon in late 2007 to focus on its non-core
gold, nickel and uranium exploration assets.
It now seeks to meld the companies to create a mid-tier gold
miner with two major development projects and cash reserves of
about $21 million.
The combined company would have a resource base of three million
ounces equivalent of contained gold, with a reserve base of 600,000
ounces of contained gold.
It would target initial annual production of 200,000 ounces of
gold equivalent within five years.
Key assets are the Rover-1 gold-copper project southwest of
Tennant Creek, in the Northern Territory, and the Central Murchison
gold project in Western Australia.