Undeterred by the plunge in gold prices, China's Zijin Mining is pushing ahead with its project buy-up in WA, with 89 per cent Zijin-owned Norton Gold Fields expected to emerge from a trading halt this week to announce it will acquire near neighbour Kalgoorlie Mining Company.
In what is understood to be a scrip-based deal worth about $10 million, Norton is expected to add Kalgoorlie Mining's 422,000 resource ounces to its WA gold holdings later this week.
After being taken over by Zijin in a $229 million deal last year, Norton has made no secret of its plans to add to its WA gold portfolio. In a recent interview with _WestBusiness, _ Norton managing director Dianmin Chen said it was likely to use scrip for future acquisitions, because its Chinese parent was keen to increase the number of Norton shares trading and was happy for its stake to be diluted as Norton expanded.
Norton agreed to process ore from Kalgoorlie Mining's Bullant mine in January. Bullant, the major target for Norton, is yet to return to production but has a resource of 300,000 ounces of gold at an average grade of 5.1 grams a tonne. Kalgoorlie Mining shares last traded at 0.5¢ and Norton at 17¢.
Ends
My comments (do your own research): KMC shares on issue = 1,301,312,253. Takeover at $10m = $0.00768/share. Scrip based deal might be 1:22 (1 NGF share per 22 KMC shares). Hope KMC directors can improve on this opening offer. Cash and scrip deal/ cash only deal please. NGF has plenty of cash!
KMC Price at posting:
0.5¢ Sentiment: ST Buy Disclosure: Held
