Westgold to withdraw Gascoyne offer

Westgold Resources has sought to withdraw its $120 million takeover proposal for Gascoyne Resources after a conflicting merger was approved by the Supreme Court of Western Australia.

This morning, Westgold announced it would not waive a condition within its all-scrip takeover of fellow goldminer Gascoyne, which required the target to terminate a merger with Subiaco-based explorer Firefly Resources.

The scheme implementation deed with Firefly did not include a termination right to Gascoyne even if its board acknowledged a superior offer.

The SID was approved by the Supreme Court on Monday afternoon.

As such, Westgold has sought consent from the Australian Securities and Investments Commission to withdraw its offer but cautioned there was no guarantee this would be provided.

It also said consent could be provided with conditions.

Westgold was seeking to acquire Gascoyne and its Dalgaranga operation through an all-scrip takeover that would’ve valued the target at roughly $120 million.

The bidder claimed three shareholders representing nearly half of Gascoyne’s issued capital had indicated their support for the takeover.

Executive director Wayne Bramwell said Westgold was disappointed with the court's decision.

"[We] and almost 50 per cent of Gascoyne’s shareholder base believed that the combination of Westgold and Gascoyne would deliver a superior outcome for Gascoyne shareholders,” executive director Wayne Bramwell said.

“We identified the opportunity to enhance the low grade Dalgaranga operation with additional high-grade ore from our Cue assets for the benefit of both Westgold and Gascoyne shareholders and our offer reflected that value.”

Mr Bramwell said Westgold would continue to pursue a disciplined growth strategy.

The company has three mines in the Mid West, with the region also home to Gascoyne’s Dalgaranga operation and Firefly’s Yalgoo project.

Gascoyne plans to incorporate Yalgoo into its Dalgaranga operation where mining is expected to finish in early 2025.

Shares in the company were down 6.9 per cent at 12:20pm AEDT to trade at 34 cents.

Westgold’s shares were down 0.3 per cent to $1.88.