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Castlemaine Goldfields Ltd, Target's Statement in response to off-market takeover bid by LionGold Corp Ltd

Letter from the Chairman

As you are aware, we wrote to you on 17 April 2012 in relation to a recommended takeover offer by LionGold Corp Ltd (LionGold) for your Castlemaine Shares (Offer). On 13 June 2012, LionGold lodged its Bidder's Statement containing the Offer.

Under LionGold's Offer, you are being offered 2 LionGold Shares for every 9 Castlemaine Shares you own. Your Castlemaine Directors unanimously recommend that you accept the Offer in the absence of a Superior Proposal. The LionGold Offer closes on 18 July 2012 unless extended.

Based on the share prices of each of LionGold and Castlemaine as at the close of trading on 13 April 2012, the last trading day before the announcement of the Offer, the transaction valued Castlemaine at 18.4 cents per Castlemaine Share, having regard to the LionGold Share price of S $1.0738. This represented a 62% premium based on the last trading day volume weighted average price (VWAP) of LionGold Shares on 13 April 2012, and a 51.7 % premium to the 30 day LionGold VWAP for Castlemaine Shares prior to the announcement of the Offer.

Based on the share prices of each of LionGold and Castlemaine as at the close of trading on 26 June 2012, the last practicable date before the date of this Target's Statement, the transaction values Castlemaine at 20.6 cents per Castlemaine Share, having regard to the LionGold Share price of S$1.19. The LionGold Share price has traded relatively strongly when compared against movements in global equities and particularly resource stocks in the period leading up to and following the announcement of the Offer.


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