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Workers refurbishing CIL tanks at Noble s Bibiani gold project in Ghana. Picture: Hugh Brown.
Workers refurbishing CIL tanks at Noble's Bibiani gold project in Ghana. Picture: Hugh Brown.

UPDATE 1.45pm: Noble Mineral Resources has poured cold water on Resolute Mining’s $85 million financing offer and reiterated its “strong support” for the alternative tie-up with China’s Zhongrun.

The company’s announcement follows yesterday’s move by Resolute to offer to buy up to 20 per cent of Noble’s stock as well as a $85 million financing package to help it ramp-up its Bibiani gold project in Ghana.

Resolute made its offer conditional upon Noble abandoning a similar equity and financing deal with Zhongrun.

Noble managing director Wayne Norris said after carefully reviewing the terms of Resolute’s proposal, the Noble board remained strongly and unanimously of the view that proceeding with the Zhongrun transaction continued to be in the best interests of all Noble shareholders.

“Noble has a number of fundamental concerns regarding the unsolicited and incomplete proposal put forward by Resolute,” he said.

“It is of inferior value to Zhongrun’s proposal, does not provide the immediate funding certainty that the Zhongrun proposal does, and would leave the company highly geared by comparison.

“By contrast, the proposed two-tranche $84.7m placement to Zhongrun will provide a much needed immediate cash injection, with a commitment from Zhongrun to transfer the tranche one funds to Noble within 24 hours following Noble shareholder approval on October 31.”

Mr Norris said the Zhongrun proposal would see Noble ungeared, unhedged and fully funded through the Bibiani project ramp-up to cash-flow positive production.

“Noble considers the risks associated with not approving Tranche 1 of the Zhongrun transaction to be significant and any delay to the receipt of this immediate equity funding may be detrimental to Noble’s ability to meet existing liabilities and fund ongoing activities,” he said.

Mr Norris urged Noble shareholders to vote in favour of tranche one of the Zhongrun transaction at the company’s meeting next Wednesday.

However Resolute this afternoon reaffirmed its view that its proposal was superior to the Zhongrun offer and expressed disappointment that Noble had refused to engage with it.

Resolute also rejected suggestions it was trying to get control of the company without paying a control premium.

It was misleading to suggest its proposal lacked certainty, Resolute said.

Noble shares were off half a cent to 13.5 cents at the close of trade while Resolute shares were down 5.5 cents, or 3.04 per cent, to $1.755.

The West Australian

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