South African gold miner Durban Roodepoort Deep (DRD) yesterday
announced that it intends to merge with Australian miner Emperor
Mines, after weekend discussions between the two parties.
CEO of DRD Ian Murray explained that DRD intends to acquire at least 90% of the Australian miner, and will offer one DRD share for every five Emperor shares.
“We have valued Emperor at A$105-million. We have also informed shareholders not to take action just yet, although we will retain our unhedged gold status and highly liquid stock,” he commented.
DRD currently owns 19,78% of Emperor, and said it intends to acquire 100% of the company by June this year.
If the merger proposal is accepted, the company will reportedly be worth around A$1,1-billion, with international status.
The company bid A$0,88 a share.
Murray stated that DRD’s strategy included restoring margins in South African operations to an eventual goal of 20%, although they have apparently risen to around 14% currently.
He said that the company is intending to build its Australasian production base, also by identifying third leg opportunities, inevitably establishing DRD as an international gold producer.
“The time is right for the Emperor bid. We have aspirations to increase mining activity in Fiji and Papua New Guinea, and will then have eight mines, with a total reserve of 18-million ounces,” he said.
Murray revealed that he also wants to develop Australian operations under one management team, in order to keep production costs at a low.
Operationally, the DRD currently produces 169 000 oz per quarter in South Africa, comprising 60% of its activity, with 97 000 oz mined in Australasia (40%), with 80% being offshore profit and 20% onshore profit.
DRD had reportedly been expected to bid for Emperor, as it seemed like a good fit with the company’s previously stated expansion plans outside South Africa.
The company recently acquired a $73-million interest of the Porgera Gold Mine, in Papua New Guinea, in line with its growth strategy.
One of the conditions of the merger is that the gold price would not fall below R78 000/kg. The metal’s current value is R85 000/kg.
“The merge will place us at the eighth-largest gold miner in the world, unlocking the synergies between Papua New Guinea and Fiji operations, as we are focusing on being growth-orientated, and we have a strong base on which to fund this,” maintained Murray.
DRD said it expects the offer to close in May-June this year.
“This merger will complete the establishment of a sustainable Australasian base, with gold production from Tolukuma and Porgera, in Papua New Guinea, and Emperor’s Vatukoula mine, in Fiji. These operations offer consistent production, geographical diversification and positive cash flow,” he concluded.
CEO of DRD Ian Murray explained that DRD intends to acquire at least 90% of the Australian miner, and will offer one DRD share for every five Emperor shares.
“We have valued Emperor at A$105-million. We have also informed shareholders not to take action just yet, although we will retain our unhedged gold status and highly liquid stock,” he commented.
DRD currently owns 19,78% of Emperor, and said it intends to acquire 100% of the company by June this year.
If the merger proposal is accepted, the company will reportedly be worth around A$1,1-billion, with international status.
The company bid A$0,88 a share.
Murray stated that DRD’s strategy included restoring margins in South African operations to an eventual goal of 20%, although they have apparently risen to around 14% currently.
He said that the company is intending to build its Australasian production base, also by identifying third leg opportunities, inevitably establishing DRD as an international gold producer.
“The time is right for the Emperor bid. We have aspirations to increase mining activity in Fiji and Papua New Guinea, and will then have eight mines, with a total reserve of 18-million ounces,” he said.
Murray revealed that he also wants to develop Australian operations under one management team, in order to keep production costs at a low.
Operationally, the DRD currently produces 169 000 oz per quarter in South Africa, comprising 60% of its activity, with 97 000 oz mined in Australasia (40%), with 80% being offshore profit and 20% onshore profit.
DRD had reportedly been expected to bid for Emperor, as it seemed like a good fit with the company’s previously stated expansion plans outside South Africa.
The company recently acquired a $73-million interest of the Porgera Gold Mine, in Papua New Guinea, in line with its growth strategy.
One of the conditions of the merger is that the gold price would not fall below R78 000/kg. The metal’s current value is R85 000/kg.
“The merge will place us at the eighth-largest gold miner in the world, unlocking the synergies between Papua New Guinea and Fiji operations, as we are focusing on being growth-orientated, and we have a strong base on which to fund this,” maintained Murray.
DRD said it expects the offer to close in May-June this year.
“This merger will complete the establishment of a sustainable Australasian base, with gold production from Tolukuma and Porgera, in Papua New Guinea, and Emperor’s Vatukoula mine, in Fiji. These operations offer consistent production, geographical diversification and positive cash flow,” he concluded.
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Edited by: laurian clemence
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