Chinese producer Shandong Gold has made a play for Cardinal Resources with an off-market cash takeover offer for 100 per cent of the target’s shares.
Shandong increased its offer in March by 75.5 per cent on Cardinal’s 20-day volume weighted average price ($0.34 per share).
After a consideration by the Cardinal board, the directors are unanimously recommending all shareholders to accept the offer in absence of a superior proposal.
The directors, who hold a combined 6.37 per cent of Cardinal shares intend to accept the offer.
Cardinal chief executive and managing director Archie Koimtsidis said he was pleased Shandong was committed to developing its Namdini project in Ghana should the takeover be successful.
“The board of directors of Cardinal has negotiated what we consider a strong offer for our shareholders and one which delivers a significant premium to Cardinal’s market price, at a time of considerable volatility and uncertainty in global markets,” Koimtsidis said.
“I am pleased Shandong gold is committed to getting on with development of Namdini to establish the first long-life gold mine in the upper east region of Ghana, bringing many significant and long-lasting benefits to the local community and Ghana.”
Shandong chairman Li Guohong added that he was conscious of the strong working relationship Cardinal had built with the local community at the Namdini project and wanted to continue building on this.
“We have tremendous respect for the Cardinal organisation for the manner in which it has advanced Namdini to its current development status,” Guohong said.
“We are conscious of how important the development of Namdini is to both the local community and the country of Ghana. We look forward to continue to build on this close relationship for the benefit of all stakeholders of the Namdini project.”
Shandong is the largest gold producer in China and has assets in Argentina.