How's the nerve of this guy?!!! Well I guess he's staying true to his own form of grinding companies into the ground. See AZM for another example
Metals X (MLX) 17c; Westgold (WGR) 17.5c
IN a landscape littered with takeover attempts either hotly contested or simply going nowhere there's a purity of purpose to the friendly proposal from tin miner Metals X to merge with gold/copper hopeful Westgold: the latter needs dough to develop its Central Murchison gold project and Metals X has the cash. Thus the proposed union is really an alternative to a dilutionary raising on the part of Westgold, while an opportunity for Metals X to procure 100 per cent of Westgold, having held a significant stake (currently 27 per cent) in Westgold for seven years.
"I have been in this business for a long time and not all major holders are as benevolent as Metals X has been," Westgold chairman Michael Atkins says.
Atkins estimates a maximum spend of $120m on Central Murchison, $80m funded from a promised Credit Suisse facility and the remainder equity funded.
Further down the evolutionary road, Westgold was also going to need $15m to $20m to sink the first decline on its Rover 1 copper-gold project in the Northern Territory (3.9 million ounces of gold equivalent). Metals X has cash of $60m and $40m-plus of other listed investments. The merger, struck at a 33 per cent premium, looks a reasonable deal for Westgold holders who don't mind some tin exposure at a time when junior gold plays are on the nose.
Conversely, Metals X holders (who don't get to vote on the scheme of arrangement) have to be comfortable with the yellow metal. Westgold shares closed yesterday at a 6 per cent discount to the implied offer price, which makes them a sell for the doubters and a hold for the true believers.
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