Ramelius Resources shareholders got a double treat this morning: Another takeover target and confirmation of FY23 guidance!

Nick Sundich Nick Sundich, July 3, 2023

Ramelius Resources (ASX:RMS) had two pieces of good news this morning. First, that it would be growing its portfolio by acquiring Musgrave Minerals (ASX:MGV). And second, that it had met its FY23 guidance.

 

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Ramelius had a strong FY23

Ramelius finished FY23 having produced 240,996oz gold, thus meeting FY23 guidance, and sold 243,263. The WA gold miner produced 68,752oz in Q4 alone and closed with a cash (and gold on hand) balance of A$272.1m. This was up from $154.4m just three months earlier.

Ramelius delivered positive cash flow of $42.6m after accounting for the $75.1m acquired from the Breaker acquisition. This was due to an increase in forecasted production from the high-grade, high-margin penny mine.

 

And it could be better in FY24

Ramelius announced the worst kept secret on the ASX. It was buying out Cue Gold project owner Musgrave Minerals (ASX:MGV). Cue is a solid deposit with 12.3Mt @ 2.3g/t for 927,000 ounces of gold.

The Musgrave board opted to cash out rather than try and develop it themselves, arguing a takeover now was a win-win for all parties.

If Musgrave shareholders accept, they’ll get 1 RMS share for each 4.21 MGV shares held along with $0.04c in cash for each MGV share held. This deal values Musgrave at $201m, equating to $0.34 per share.

This was only a modest 19% premium to Friday’s closing price but was 27% higher than an indicative offer from Westgold (ASX:WGX) barely a month earlier.

 

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