Kentor Gold to Make Agreed Takeover Offer for Jinka Minerals Limited
Kentor Gold Limited (Kentor Gold or the Company) and Jinka Minerals Limited (Jinka Minerals) are pleased to announce that Kentor Gold will make an agreed off-market take-over offer for all the issued shares and options of Jinka Minerals, pursuant to the Corporations Act. Jinka Minerals is an Australian gold and base metals exploration company and is a public unlisted company with approximately 1,400 shareholders.
Kentor Gold Managing Director Simon Milroy said: “Kentor Gold’s shareholders will be aware of the Company’s strategy to seek to acquire advanced exploration and/or development projects. The development of the Andash Gold-Copper Project in Kyrgyzstan remains our priority; however the Jinka projects are a good fit with the existing commodity focus and will allow the Company to diversify outside of Central Asia.”
The major projects of Jinka Minerals are:
- 100% of the Burnakura Gold Project, located 50km south of Meekatharra in Western Australia;
- 100% of the Gabanintha Copper-Gold Project, located 45km south-east of Meekatharra in Western Australia; and
- 100% of the Jervois Base Metals Project, located 280km north-east of Alice Springs in the Northern Territory.
Jinka Minerals Managing Director, Dr Michael Ruane said: “Because Jinka Minerals is an unlisted company, security holders have not been easily able to realise the value of their securities in Jinka Minerals. The offer from Kentor Gold represents fair value for Jinka Minerals’ assets and provides liquidity to security holders for their stake in Jinka Minerals.”
Details of the projects can be found in Appendix 1 of the ASX announcement.
Offer Terms
The terms of the all cash offer are as follows:
- 19.5c for each ordinary share in Jinka held by a security holder
- 3.9c for each option over Jinka shares with an expiry date of 31 July 2011 held by a security holder
- 9.6c for each option over Jinka shares with an expiry date of 31 July 2013 held by a security holder
The offer is conditional, amongst other matters, on 90% minimum acceptance by each class of Jinka Minerals security holders.
Full terms can be found in Appendix 2 of the ASX announcement.
Offer Support
Kentor Gold has entered into an agreement with Intermin Resources Limited (ASX:IRC) (Intermin), Jinka Minerals’ major shareholder, in respect of 19.9% of Jinka Minerals’ issued shares. Intermin has undertaken to accept the Offer to the extent of 19.9% of the issued shares in Jinka Minerals, by no later than 5.00pm the next business day after the Offer is made to Jinka Minerals’ Shareholders and has undertaken not to withdraw this acceptance.
Additionally, Jinka Mineral’s directors are unanimously recommending the offer to Jinka Minerals security holders in the absence of a superior bid. Subject to a superior proposal being received all the directors of Jinka intend to accept the Offer in respect of all Jinka Mineral’s shares each Director holds or controls.
Total Consideration
If successful in acquiring 100% of all of the classes of securities in Jinka Minerals, Kentor will pay out a total of $7.8 million in cash. Additionally, Jinka Minerals currently has a debt of approximately $4.9 million to related parties of Jinka Minerals. This debt becomes due and payable upon a change of control of Jinka Minerals. Kentor Gold will source the total acquisition cost (including the repayment of related party debt) of $12.8 million from its cash reserves which are surplus to the funds required for the development of the Andash Project.
Next Steps
Kentor Gold expects to lodge its offer document with Jinka Minerals, and then to deliver the offer documents to security holders, shortly after this. It is planned that the offer will close in early May unless extended.
Jinka Minerals will prepare and send its target’s statement to Jinka Minerals security holders within 15 days of Kentor Gold lodging its offer document.
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