Osino Resources Corp (Osino) says it has received a compelling proposal from an unnamed foreign mining company, surpassing Dundee Precious Metals’ offer by over N$1 billion.
Under the new proposal, Osino shareholders would receive C$1.90 for each common share, valuing the company at approximately N$5 billion (C$368 million).
The development comes in the wake of Dundee Precious Metals Inc. (DPM)’s December definitive agreement to acquire Osino Resources for N$4 billion.
DPM had offered C$0.775 in cash per Osino share along with 0.0801 of a DPM common share, implying a value of C$1.55 per Osino share and a total equity value of N$4 billion (C$287 million).
Meanwhile, the premium offered by the new proposal, approximately 32% higher than the implied value of the consideration in the DPM Arrangement Agreement, underscores the enhanced value proposition presented by the foreign-based mining company.
“Based on the closing price of the DPM common shares on the Toronto Stock Exchange as of February 16, 2024, the superior proposal represents a premium of approximately 32% to the implied value of the consideration offered pursuant to the DPM Arrangement Agreement and approximately 68% premium to the unaffected share price one trading day prior to the announcement of the DPM Arrangement Agreement,” said Osino’s President and CEO Heye Daun.
He further noted that the new offer includes a US$10 million (N$188 million) loan for the Twin Hills gold project’s development and company liquidity needs.
The offer also covers the termination fee if the DPM Arrangement Agreement ends due to the new offer.
“An advance in an amount equal to the termination fee payable by the company in the event of a termination of the DPM Arrangement Agreement as a result of the new offer. The new facility will be convertible into common shares at C$1.39 per common share, at the offeror’s option at any time; and in the event the reverse termination fee is payable by the offeror,” he added.
He said the new facility will be convertible into common shares at C$1.39 per common share at the offeror’s option at any time; and in the event the reverse termination fee is payable by the offeror.
Daun emphaised that DPM has declined to amend the agreement despite a better proposal, the company and the offeror plan to terminate the current agreement and swiftly execute a new one.
He noted that logistics, including paying the termination fee to DPM, are being arranged.
“The offeror and the company have confirmed their readiness and intention to execute the proposed arrangement agreement promptly following termination of the DPM Arrangement Agreement. The company is in the process of settling logistical matters including payment of the termination fee to DPM in anticipation of the termination of the DPM Arrangement Agreement in accordance with its terms,” he said.
This comes as a feasibility study by Osino in June 2023 outlined an open-pit project with a 13-year mine life and average annual production of 175,000 ounces of gold over the first five years, with the first production targeted in the second half of 2026 in Twin Hills.
Twin Hills is a multi-million-ounce gold project of Osino with 2.15 million ounces of Proven and Probable Reserves located in Namibia.
