GOR +13.88%: Last night rejected a takeover offer from South African based global gold producer Gold Fields – despite attempts to engage privately, Gold Fields publicly disclosed its offer, which Gold Road addressed as ‘extremely disappointing’ in their note today – a salty end to negotiations.
The offer coincided with temporary production issues and didn’t account for the potential underground expansion at the Gruyere mine where GOR are due to explore and drill over the next 18 months – value accretive if targets are hit.
Northern Star’s $5bn deal to buy De Grey Mining (DEG) most likely played a significant part in management’s rejection of the bid, given that Gold Road owns a 17.3 per cent stake in De Grey highlighting GOR’s impressive diversification amongst its portfolio of assets. Based on the price action today, the market knew this was a low-ball offer though we suspect this won’t be the last bit of corporate activity relating to GOR in the short term.
MM remains cautiously bullish GOR
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