Zhaojin offer for Tietto materially undervalues gold miner - expert

Zhaojin Mining Industry Co

27/11/2023 02:09

MELBOURNE, Nov 27 (Reuters) - Zhaojin Mining's  1818.HK 
$404.57 million bid for Tietto Minerals  TIE.AX  vastly
undervalues the West African gold miner, according to an
independent expert report on Monday. 
    The China gold miner, Tietto's second biggest shareholder
with about a 7% holding, last month made an offer to buy the
remaining 93% stake for A$0.58 per share. That represented a
36.5% premium to the stock's Oct. 29 close.
    The offer comes as China resources companies become more
active in global buyouts. China's MMG  1208.HK  last week agreed
to buy the parent company of the Khoemacau copper mine in
Botswana, for an enterprise value of $1.88 billion.
    But Tietto Minerals recommended shareholders do not accept
Zhaojin's offer, saying it undervalued the company. Tietto began
production at its Abujar Gold Project in western Ivory Coast in
January.
    As part of the process, independent expert Grant Thornton
has assessed the fair value of Tietto shares to be in the range
of A$0.79-A$0.93, a premium of 36%-59% to the offer, Tietto said
in an exchange filing. That values the company at up to A$1.1
billion.  
    Shares in Tietto were up 3.8% at A$0.62 on Monday.
    Tietto expects to produce 75,000 ounces to 85,000 ounces
gold at an all-in sustaining cost of $1,175 to $1,350 per ounce
this year. Gold  XAU=  traded at $2,014 an ounce on Monday. 
    Zhaojin has said it believes the offer is fair value and
that it has already received approval from Australia's Foreign
Investment Review Board for the offer. The offer period will
close on Dec. 14.
    

 (Reporting by Melanie Burton; Editing by Mrigank Dhaniwala)
 ((melanie.burton@thomsonreuters.com Twitter: @MelanieMetals;
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