rms waives key condition

N E W S
• R E L E A S E •
FOR IMMEDIATE RELEASE
Tuesday August 11, 2009
RAMELIUS WAIVES KEY CONDITION ON $93 MILLION OFFER
FOR FELLOW GOLDFIELDS NEIGHBOUR - DIORO
Ramelius Resources Limited (ASX: “RMS”) has this afternoon resolved to make its current
$93 million takeover offer for all the shares in its WA goldfields neighbour, Dioro Exploration NL
(ASX: “DIO”), free of all conditions apart from the previously stated “regulatory approval”
condition that will allow it to seek approval for the offer from the Foreign Investment Review
Board.
The decision, made at a meeting of the Ramelius Board, sets aside the previous key condition
requiring a 50.1% minimum acceptance announced when the bid was launched on July 30.
As at close of trade today, the Proposed Merger values Dioro at approximately $93.4 million or
$1.02 per share, whereas the unsolicited offer from Avoca values Dioro at approximately
$68.5 million, or just $0.75 per share.
On that basis, the Ramelius offer represents:
- A circa 36% premium to the unsolicited Avoca Offer;
- A circa 30% premium to the last traded Dioro share price; and
- A circa 158% premium to the last traded price before Avoca announced its unsolicited
takeover in April.
Ramelius’ decision to drop the 50.1% minimum acceptance condition follows an announcement
by rival Dioro bidder, Avoca Resources Limited, to this afternoon declare “final” its lesser valued
offer for Dioro, with that bid given a final extension to next Wednesday, August 19.
“Dioro shareholders now have clear certainty about the intentions of both bids – with our offer
remaining far superior to the now closed-off Avoca package,” Ramelius’ Chairman, Mr Robert
Kennedy, said today.
“There was obviously a very strong reluctance by Dioro shareholders to accept Avoca’s
overtures – with barely half a percent of Dioro’s total shareholders in the past week, moving to
accept the Avoca bid,” Mr Kennedy said.
“By going unconditional on all but the FIRB condition, Ramelius now presents Dioro
shareholders with an uncluttered pathway to holding a 45% interest in a merged gold entity that
offers the tantalising prospect of synergising two brand new, close proximity underground gold
mines with considerable long life potential from further resource definition and exploration.
“Significantly, Ramelius is in a position to lodge its Bidder’s Statement by Thursday this week –
if not sooner – with ASIC and the ASX to give Dioro shareholders an opportunity to consider the
Ramelius offer while the Avoca offer remains open.
“Ramelius has also sought the consent of the Dioro Board to dispatch the Bidder’s Statement
and acceptance forms earlier than the 14 day statutory period allowed under Corporations Act.
“That is a rapid delivery in any takeover schedule and is strongly indicative of our intentions to
counter Avoca’s hostile and under-valued offer for Dioro and to bring share value relief to Dioro
and its shareholders in an inclusive manner.”
Mr Kennedy said Avoca’s record over four months of three offer extensions and only a marginal
increase in its bid terms, was simply a gamble with Dioro shareholders that had to date, not paid
off and was now not likely to do so with its offer declared final.
“Even before today’s decisions by both Avoca and Ramelius, the market was already assigning
a strong ‘No vote’ on Avoca’s bid as Dioro shares had traded at as much as 30% higher than
the value of Avoca’s terms, but still well below the superior Ramelius offer.”
Mr Kennedy said a merger of Ramelius and Dioro made a lot of commercial sense – seeing two
of Australia’s most exciting high grade gold miners come together into a single high profile
entity, and in a merged structure that ensured accepting Dioro shareholders were not diluted to
an irrelevant minority position as they would be in accepting the Avoca offer.
“They will hold about 45% of a combined Ramelius-Dioro, compared to just 13.4% of the
register under an Avoca takeover offer,” Mr Kennedy said.
Ramelius’ Chief Executive Officer, Mr Ian Gordon, said today a merged Ramelius-Dioro could
be a new force in Australian gold mining with high grade assets, strong margins, proven
production track record and “huge potential” for further exploration upside.
“Our proposed entity would be strongly capitalised to fund ongoing development and
exploration,” Mr Gordon said.
“Critically, Ramelius has $26 million in the bank, is debt free, is forecasting strong near-term
cash flow from our imminent start to underground mining at Wattle Dam after a successful openpit
campaign, we can discharge Dioro’s current debt and help that company manage its shortterm
capital requirements.”
“It would generate immediate strong cash flow from combined assets – particularly our existing
Wattle Dam mine and Dioro’s 49%-owned Frog’s Leg gold mine - with highly transparent
production, cash cost, milling synergies and future exploration growth.”
Ramelius also announced today that all but one of the other conditions, including a ‘No
Prescribed Occurrence’ condition and a ‘No Material Adverse Change’ condition, had been
waived.
The only condition remaining is Regulatory Approval from the Foreign Investment Review Board
for the transaction, as a major Canadian gold fund has a stake in Ramelius.
MEDIA CONTACT:
Ian Gordon Ramelius Resources (08) 9250 6644 0448 330 160
Kevin Skinner Field Public Relations (08) 8234 9555 0414 822 631