Page 9 - pd280-Mar20-mag-web_Neat

they [Spectrum shareholders] can retain their exposure to Pen-
ny West and they get the added bonus of joining a company of
our size and growth potential.”
In a research report, RBC Capital Markets said the implied
value of the offer for Spectrum was $208 million.
The day Ramelius’s off-market offer for Spectrum was made,
the latter closed 36% up to be trading at 14c/share and market
capped at $187 million.
Adams and the rest of the board of directors at Spectrum
unanimously recommended the offer and encouraged share-
holders to follow suit.
At the time of print, Ramelius held about 5% of Spectrum and
vowed to fund the cash component of the acquisition from exist-
ing working capital or the $35 million syndicated finance agree-
ment it has in place.
The bidder’s and target statements were expected to be des-
patched to Spectrum shareholders on February 28 and assum-
ing the process is straightforward, Ramelius could have ore
from Penny West into the Checkers mill at Mt Magnet in the
September 2021 quarter.
One of the conditions set out for the deal to proceed is that
the Bloomberg spot gold price does not fall below $2,000/oz
at any time during a day for three consecutive days between
announcement date and the end of the offer period (each ex-
clusive). The condition will be removed in the event the offer is
extended.
Barring any interference, the deal could be done by the end of
March and while Spectrum shareholders know they will not be
fully exposed to the entire exploration and development upside Penny West is the point of focus of Ramelius’ bid for Spectrum Metals
at Penny West, access to Ramelius’ cash flow-generating as-
sets and 90% of the Tampia Hill development could be sweet
enough.
Last year was the fifth consecutive annual profit ($21.8 mil-
lion after tax) reported by Ramelius, which returned an inaugural
dividend of 1c/share. Exploring
From the Mt Magnet, Edna May, Vivien and Marda gold mines
it owns and operates, Ramelius produced 196,679oz gold at
AISC of $1,192/oz for 2019. together for success
Guidance for FY2020 is 205,000-225,000oz gold at AISC of
$1,225-1,325/oz.
“Our guidance for 2020 remains unchanged. This process will
take a number of months to run through, but it [Penny West] is
one of the highest grade undeveloped gold assets in Australia.
Its potential is significant, not just what has already been found,
but with what could be found down the track. We hope that the
transaction can be bedded down fairly quickly,” Manners said.
“We will continue to be an explorer of that area as well, as with
our existing assets and in parallel we’ll look to bring the asset
into production as quickly as we can. I think it will add a new
dimension to Mt Magnet, it is an incredibly strong asset with a
cost profile that I think will be one of the lowest in the country.”
Penny West, 25km south of the Youanmi mining centre, was
previously mined by Eastmet/Metana (GMA) in the early 1990s Established in 1993 Bostech Drilling has successfully
and produced 91,400oz @ 18.1 g/t gold. completed exploration and mining projects across
“It is an outstanding deposit and the benefit Ramelius has is Australia and overseas.
Whether it be the Deserts of central Australia or the
all the infrastructure just up the road,” Adams said. “It would cost Forests of South Western Australia Bostech can assist
us $100 million to put all of that in plus all of the dilution to get you with your drilling requirements.
there. I think at the end of the day, it is a very good deal for us.
Penny North is a special deposit and hopefully both shareholder Industry leaders in:
groups stand to benefit from that being put into production at the RAB/Aircore - GradeControl - Reverse Circulation
right time.” Complex Remote Exploration - Zero Impact & Tight Access

– Mark Andrews 29a Clayton St, Bellevue WA 6056
e: admin@bostech.com.au w: www.bostech.com.au 08 9250 4252

aUSTRaLIa’S PaYDIRT MaRCH 2020 Page 9