Tietto MD and CEO Matt Wilcox
Australia-headquartered Tietto Minerals has rejected an offmarket takeover attempt by Chinese shareholder Zhaojin, stating that the A$0.850-a-share offer materially undervalued the company.
In a response to the takeover, which Zhaojin made earlier this week, Tietto said on Friday that the timing of the takeover was opportunistic.
Tietto believes that the offer does not reflect the continuously improving performance of its Abujar gold project, in Cote d’Ivoire, following first production in early 2023.
Tietto reported that it had recovered 12 057 oz of gold in October at its Abujar gold mine.
MD and CEO Matt Wilcox said that mining rates were ahead of milling rates, as the wet season was over, which would enable the mine to lift grades from November onwards.
“Annualising cash generation in October, as we continue to ramp up gold production at Abujar, shows the very strong free cash flow generation potential of the Abujar mine,” he said.
Tietto also said that the offer was highly conditional and subject to a number of defeating conditions, including the receipt of regulatory approvals from a number of Chinese regulatory authorities.
A Zhaojin spokesperson said that the company was disappointed that the Tietto board did not see the value of the offer, which represented a premium of 42% to the five-day volume-weighted average.
“We believe the offer provides value and certainty for Tietto shareholders and we will continue discussions with the board and Tietto shareholders on the merits of our proposal.”
The spokesperson added that Zhaojin already had Australian Foreign Review Board approval in place and that it had progressed work on obtaining other required approvals.
“We believe we are well placed to obtain all required Chinese regulatory approvals.”