Gold Road Resources' offer for DGO to be earnings dilutive- Jefferies

De Grey Mining

04/04/2022 20:58

** Brokerage Jefferies says Gold Road Resources'  GOR.AX 
potential acquisition of DGO Gold  DGO.AX  will be about 17%
dilutive to its earnings per share in CY22 
    ** GOR on Monday made a unanimously recommended, off-market,
all-scrip takeover offer for smaller rival DGO, valuing it at
about A$308 million ($232.45 million)  urn:newsml:reuters.com:*:nASX281VHG 
    ** DGO soared on the news, ending Monday's trading session
15.3% higher, recording its best session since June 29, 2020 at
A$3.46 
    ** DGO's "core asset", according to Jefferies, is its 14.4%
stake in De Grey Mining  DEG.AX , which owns the Mallina project
in Western Australia, and is in the exploration stage 
    ** Brokerage says it does not see DGO's other equity
holdings as being "strategically aligned" with GOR in the medium
to long term
    ** Maintains price target of A$1.90 and "buy" rating 
    ** Out of eight analysts covering GOR's stock, five rate it
'buy' or higher, three 'hold'; median PT is A$1.75  
    ** Shares of GOR closed 1.6% higher at A$1.62 on Monday, up
3.2% YTD
    
($1 = 1.3250 Australian dollars)

 (Reporting by Harshita Swaminathan)
 ((Harshita.Swaminathan@thomsonreuters.com))