Perseus Mining (ASX:PRU) has thrown its hat in the ring and is seeking to acquire OreCorp (ASX:ORR) by way of an off-market takeover offer.

OreCorp confirms that on Friday evening (19 January 2024) it received a confidential and conditional proposal from Perseus to make a takeover tilt for OreCorp.

The $2.4 billion market capitalisation company is offering OreCorp shareholders a cash consideration of $0.55 per OreCorp share. The offer implies the takeover target’s equity value to be about $258 million.

OreCorp is working through the Perseus offer but says it has not changed its existing unanimous recommendation in favour of the current offer by Silvercorp Metals.

On 5 January 2024, OreCorp reported Silvercorp (NYSE:SVM) agreed to acquire, by means of an off-market takeover, all of the OreCorp shares not already owned by Silvercorp comprising 0.0967 common shares of Silvercorp and $0.19 cash per OreCorp share.

The Silvercorp offer values OreCorp at about $276.5 million.

OreCorp says the offer from interloper Perseus is therefore not considered to be superior and the company continues to recommend in favour of the Silvercorp proposal.

CIBC Capital Markets is acting as financial advisor to OreCorp, while Allen & Overy is acting as its legal advisor regarding the Silvercorp offer.

Canaccord Genuity is acting as financial advisor to Silvercorp. King & Wood Mallesons, Australia and A&K Tanzania are acting as Silvercorp’s Australian and Tanzanian legal advisors, respectively.

Perseus says it will fund any transaction with existing cash and bullion reserves which amounted to US$594 million as of 30 September 2023. The company says its offer is also subject to a 50.1% minimum acceptance condition and other customary conditions that are no less favourable than the Silvercorp takeover.

Perseus Mining Executive Chairman and Chief Executive Officer Jeff Quartermaine says if completed, Perseus will have 3 operating gold producing mines at a rate of over 535,000 ounces per year in FY2023.

“The acquisition of OreCorp’s shares aligns with Perseus’s growth strategy of building an asset portfolio comprised of geopolitically diverse, high-quality gold assets located on the African continent.

At the same time, this offer is demonstrably superior to the Silvercorp takeover in terms of price, based on recent Silvercorp trading, and in terms of consideration certainty, being all cash.

Perseus has the financial capacity, technical expertise, and in-country relationships required to optimally develop OreCorp’s Nyanzaga Gold Project and bring the gold mine into production. This development would enable Perseus to continue to deliver on its corporate mission of creating material benefits for all of our stakeholders, including the government and people of Tanzania. 

If the acquisition is completed, Perseus will have three operating mines producing gold at a rate of over 535,000 ounces per year in FY2023 and two high-quality development projects that, when brought on stream, as intended, will enable Perseus to maintain or exceed that targeted production level well into the next decade.” 

OreCorp is a mineral developer focused on its key Nyanzaga Gold Project in northwest Tanzania.

Perseus Mining is a miner which currently operates 3 gold mines in West Africa and has been preparing for the development of a fourth mine in Sudan. In FY23, Perseus produced more than 535,000 ounces of gold at a weighted average Australian Securities and Investments Commission (AISC).

Silvercorp is a Canadian mining company producing silver, gold, lead, and zinc with a long history of profitability and growth potential.

Write to Adam Drought at Mining.com.au

Images: Perseus Mining