Saturn Resources to acquire Shanta Gold
Saturn Resources is set to acquire Shanta Gold. Shanta Gold announced it has agreed to a £141.95 million ($180.7 million) takeover bid. This acquisition reflects ongoing changes and challenges in the mining industry, with companies seeking strategic opportunities and responding to market dynamics.
The deal offers Shanta shareholders 13.5 pence per share, representing a 6.7% premium to the closing price before the announcement. Saturn Resources, part of ETC Holdings, mentioned that publicly listed gold companies’ valuations have de-rated.
All-cash offer
UK-listed African gold miners, including Shanta, have seen a decrease of over 40% in Price to Net Asset Value (P/NAV) compared to five years ago. Factors contributing to this devaluation include lack of diversification, jurisdictional issues, and poor liquidity in the junior gold mining sector.
The acquisition is described as an all-cash offer, providing Shanta Gold shareholders with an exit opportunity in cash, especially considering the current high gold prices. Shanta Gold had been approached by Shandong Gold, Chaarat Gold, and Yintai Gold the previous year, but negotiations did not result in a deal.
Shanta Gold owns and operates two gold mines in Tanzania: New Luika (the country’s fourth-largest mine) and Singida. The company also has the West Kenya project, considered one of Africa’s highest-grading gold assets, along with exploration properties in both Tanzania and Kenya.
