Perseus gets key OreCorp shareholders onside with sweetened bid

Perseus Mining (TSX: PRU; ASX: PRU) announced on Wednesday that it has raised its off-market takeover offer for OreCorp (ASX: ORR) as it seeks to beat out Canadian rival Silvercorp Metals (TSX: SVM; NYSE: SVM) in acquiring the Africa-focused gold explorer.

The new per-share offer price of A57.5¢ represents a 4.5% increase over its previous bid of A55¢, which was turned down by OreCorp earlier in the year. However, the Perth, Australia-based gold miner has maintained its confidence in completing a deal, and earlier this month, it extended its previous offer to April 19.

Perseus currently holds 22.01% of OreCorp’s share capital, having increased its stake by another 2.11% just before making its new offer. It is now the largest shareholder of OreCorp, just ahead of Silvercorp (21.11%).

The companies are battling for control of OreCorp’s Nyanzaga project in Tanzania, located near Barrick Gold’s (TSX: ABX; NYSE: GOLD) Bulyanhulu mine and AngloGold Ashanti’s (NYSE: AU; JSE: ANG) Geita mine. A 2022 definitive feasibility study gave the project an after-tax net present value of US$618 million at a 5% discount rate and an internal rate of return of 25%.

In a news release confirming Perseus’ latest bid, OreCorp said it has notified Silvercorp of a “superior proposal” in accordance with the matching rights process set out in the bid implementation deed signed between the companies in December 2023.

Silvercorp, which made its takeover proposal in August 2023, now has a five business days to make a better offer.

If it doesn’t, OreCorp’s board will recommend that shareholders accept Perseus’s amended proposal, the Australian gold developer said.

OreCorp also stated that it had received statements of intent from major shareholders Tim Goyder and Nick Giorgetta, who together hold 15.6% of its shares, indicating they intend to accept the new proposal from Perseus.

Geographically, Perseus is the closer suitor with three operating mines in West Africa producing gold at a rate of more than 535,000 oz. per year. Silvercorp has two producing mines in China but has been looking to diversify its portfolio.