Johannesburg - Exploration company Goliath Gold has received a buy out offer from its parent company.
Goliath Gold made this announcement to shareholders this morning, noting Gold One - which owns 72% of the gold explorer - was offering R1 a share to minorities if they accept immediately.
The JSE-listed gold explorer is currently trading flat at R1.50. This makes the buyout deal worth R41.2 million, while Goliath Gold’s market capitalisation is currently at R221 million.
Those shareholders who wish to defer getting their payout can elect to receive R1.60, or a total payout of R66 million.
Goliath Gold did not indicate why its parent company wished to buy it out and delist it. Gold miners have been facing tough times lately with wage negotiations on the go and a sharp fall of in demand for the yellow metal.
Goliath Gold is a South African incorporated mining exploration company that has been listed on the main board of the JSE since May 2011. The gold explorer has yet to report revenue and has been loss-making for some time, as is typical of exploration companies.
The company was created by Gold One through the reverse takeover of White Water Resources.
Exploration
It is focused on identifying and exploring diversified resources across Southern Africa. It currently holds gold prospecting rights and a mining right over several contiguous areas in South Africa’s East Rand Basin in the Gauteng Province as well as prospecting rights for heavy mineral sands over an area within South Africa’s Western Cape Province. Opportunities in other mining-friendly African jurisdictions are also being considered.
Its current exploration portfolio comprises an established mineral gold resource base of 15.01 million ounces.
In the previous financial year, it recorded an increase of about 40% in its consolidated gold resource estimate, which now totals 15.01 million ounces at a grading of 4.75 grams per ton.
This resource estimate spans a consolidated region in the East Rand Basin in Gauteng of about 62 540 hectares and comprises six prospecting rights and one new order mining right.
Goliath is also exploring a heavy mineral sands deposit in the Western Cape and is hopeful of securing an exclusive prospecting licence for a greenfield target in Northern Namibia, believed to be possible iron-oxide copper-gold massive sulphide and/or epigenetic vein mineralisation.
Goliath also anticipated being granted seven gold mining permits for areas within the East Rand Basin, known as Project Phoenix, and an additional prospecting right in the Western Cape to expand the company’s existing heavy mineral sands project, known as Project Elephant.
The company’s current mining right is for the Sub Nigel mine in the East Rand, which was placed on care and maintenance in 2011.
Gold One’s offer is subject to approvals.
IOL