Perseus Mining, listed on the ASX and TSX under the symbol PRU, remains optimistic about its proposed acquisition of OreCorp, an African gold developer. In a statement issued on Monday, Perseus expressed confidence in obtaining unconditional approval from the Tanzanian Fair Competition Commission (FCC) regarding its off-market takeover bid for OreCorp.
According to Perseus, the FCC has issued a notice of complete finding, signaling its acceptance of Perseus’ merger clearance request. This development clears the way for the FCC to issue a resolution, anticipated before the end of the month. Given that Perseus Mining currently has no operations in Tanzania, the company does not anticipate encountering competition concerns or other issues with its merger clearance request.
Perseus’s bid for OreCorp presents a challenge to OreCorp’s existing deal with SilverCorp, as Perseus’s offer includes a 4% premium. OreCorp’s independent expert report, prepared by BDO, valued SilverCorp’s offer at A$53.4 cents, compared to Perseus’s all-cash bid of A$55 cents per share, amounting to a total of A$258 million. Perseus has questioned the basis for BDO’s recommendation of SilverCorp’s proposal.
Both Perseus and SilverCorp are eyeing OreCorp’s Nyanzaga project, which is estimated to require $474 million for construction and is projected to produce 242,000 ounces of gold annually over its first decade. Situated approximately 30 km northeast of Barrick Gold’s Bulyanhulu mine and 60 km east of AngloGold Ashanti’s Geita gold mine, Nyanzaga boasts an after-tax net present value of $618 million and an internal rate of return of 25%, based on a gold price of $1,750 per ounce, as per a definitive feasibility study issued in August 2022.
It’s noteworthy that the government of Tanzania holds a 16% non-dilutable free carried interest in the Nyanzaga project, indicating its significant stake in the venture. As Perseus Mining awaits final approval from the FCC, the outcome of its bid for OreCorp remains eagerly anticipated within the mining industry.
