Noble Mineral Resources has been forced to accept an $85 million financing offer from Resolute Mining after its preferred proposal from Chinese group Zhongrun Mining Investment fell short of gaining shareholder approval.
Zhongrun's proposal attracted the backing of more than 250 million of the company's shares at a shareholder meeting yesterday, while just over 267 million securities voted against acceptance.
Noble announced today that it had accepted a new offer presented to it by Resolute after the meeting, which addressed its previous concerns surrounding certainty and execution of risk.
The revised offer includes a $US15 million short term loan, to be made available immediately, a $US20 million guarantee to Investec by Resolute to support a temporary extension of the Bibiani project finance facility, and a commitment by Resolute to underwrite Noble's planned convertible notes issue.
Following acceptance of the offer, Resolute will acquire a 19.99 per cent stake in Noble.
Noble managing director Wayne Norris said the company's shareholders had made their preference clear and the board had acted immediately in their interests.
“Importantly, Resolute's revised offer addressed a number of Noble's key concerns as they related to certainty and execution risk,” Mr Norris said in a statement.
“It is the best available option for the company providing both an immediate and a longer-term funding solution.”
Resolute chief executive Peter Sullivan said the company was pleased that Noble had recognised the benefits of its financing proposal.
“We look forward to working efficiently with Noble and its advisers to implement the proposal and maximise the performance of the Bibiani asset, for the benefit of all security holders,” Mr Sullivan said.
The acceptance of the offer caps a whirlwind week for the companies, which saw Resolute sweeten its bid twice before shareholders met to vote on the Zhongrun offer.
Zhongrun had proposed to invest $87.7 million in Noble, to take a 42 per cent stake.
Up until the shareholder meeting, Noble's board of directors labelled Resolute's offers inferior, uncertain and unequitable.
Noble was seeking the funds to ramp up production at its flagship mine, the Bibiani gold project in western Ghana, to more than 150,000 ounces per year.
“The past several months have seen considerable importance placed on securing a solution to the company's immediate and longer-term financing needs,” Mr Norris said.
“Now we have this in place, we can once again focus on unlocking the potential of Bibiani for the benefit of all stakeholders.”
In early trade this morning, Noble's stock was up 8 per cent, to 13.5 cents, while Resolute shares had gained 1.5 per cent, to trade at $1.94.
