Normandy attempts takeover of Great Central

Denver

Normandy Mining (NDY-T) and a private Australian company, Edensor Nominees Proprietary, have offered to acquire all the remaining shares of Great Central Mines (GTCMY-Q) they do not already own.

Normandy and Edensor, through a jointly held company called Yandal Gold, will offer A$1.50 per share for the remaining 184 million shares in a proposal to be sent to Great Central shareholders at the end of January. Great Central has 305 million shares outstanding.

The offer amounts to a premium of about 20% over the price of Great Central’s shares as traded on the Australian Stock Exchange before the announced transaction. On the Nasdaq, an American depository receipt for Great Central represents three regular shares.

Currently, Normandy and Edensor control 40.4% of Great Central. Yandal Gold, which is held 49.9% by Normandy and 50.1% by Edensor, proposes to acquire the remaining 59.6% of Great Central. Edensor is a private trustee company for Great Central’s chairman, Joseph Gutnick.

The transaction, which is conditional on minimum acceptance of 90% of the shares and 75% of the shareholders, will give Normandy an effective 57% interest in Great Central, through its interest in Yandal Gold and the shares of Great Central it already owns.

Normandy and Edensor, through Yandal, expect to finance the acquisition through a special cash facility totaling A$276 million, provided by Chase Manhattan Bank.

Because of the nature of the transaction, Normandy will not be required to consolidate the balance sheets of Yandal Gold or Great Central Mines into its own, under Australian accounting standards.

The acquisition consolidates Normandy’s position in the emerging Yandal gold belt of Western Australia. Normandy acquired a 25% stake in Great Central in late 1997 to finance Great Central’s acquisition of two junior Australian gold producers: Eagle Mining and Wiluna Mines.

The transaction boosted Great Central into Australia’s top tier of gold producers. The company anticipates producing 750,000 oz. gold during the fiscal year ending June 30, 1999. Normandy remains the continent’s largest gold producer, at more than 1.5 million oz. per year.

Great Central operates the Bronzewing, Jundee-Nimary and Wiluna gold mines in the Yandal belt, northwest of Kalgoorlie. Bronzewing, at the southern end of the belt, produced 272,524 oz. gold during fiscal 1998. The Jundee-Nimary mine, which expanded with the acquisition of Eagle Mining in 1997, produced 293,016 oz. in 1998. The Wiluna mine produced 85,506 oz. from January to June 1998.

Total proven and probable reserves as of June 30, 1998, stood at 6.1 million oz., with another 5.8 million oz. of mineralized material not included in reserves.

As part of Australian securities law, the proposed takeover must be accompanied by an independent audit of Great Central’s assets and a fairness opinion.