SEMAFO (TSX: SMF, Stock Forum), operator of the Mana Mine in Burkina Faso, announced that the company had submitted a non-binding proposal to the board of directors of Orbis Gold to purchase 100% of the issued share capital in Orbis at a price range of A$0.62 to A$0.65 per share.
According to the news release, the offer came as a reaction to Orbis' proposed placement to Greenstone Resources announced September 23, 2014. The transaction would consist of US$20.0 million of new Orbis shares at a price of A$0.42 per share.
The company stressed that its all-cash proposal presented a far superior outcome for Orbis investors over the announced Greenstone placement and noted that considering the inherent risks in developing a greenfield mining project in West Africa, the company's cash proposal would grant Orbis shareholders an opportunity to avoid said risks while realizing an immediate and substantial cash premium on their holdings.
The transaction is still subject to pre-conditions including limited scope due diligence, the creation of a binding agreement as well as the Greenstone placement not proceeding.
The matter has been discussed since September when meetings were held in Brisbane, but the company felt it was necessary to release news of its offer today due to the reaction of Orbis' board to the company's all-cash proposal.
As a result, the company seeks to engage with Orbis shareholders to this end and has retained Clarus Securities as financial advisor and Ashurst as Australian legal advisor.
SEMAFO was in the news recently when the Montreal, Canada-based mining company released Q2 2104 financial results at the beginning of August.
Currently there are 277.4m outstanding shares with a market cap of $1.1 billion.