The Ramelius Resources Limited (ASX: RMS) share price has seen better days than today.
Shares in the gold mining company finished 3.2% in the red on Wednesday. As a result, the company's share price is now at a 22% discount to its 52-week high.
Today's move follows an announcement from Gold Road Resources Ltd (ASX: GOR) accepting the takeover offer from Ramelius for Apollo Consolidated Limited (ASX: AOP). After both Gold Road and Ramelius did a bit of back and forwards on takeover bids, the 20% shareholder (Gold Road) has accepted the deal.
Let's take a look at exactly what went down.
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Ramelius Resources share price falls on Apollo win
Investors appear to be pricing the Ramelius Resources share price for some level of dilution today following the latest market announcement.
According to the release, the bidding war has come to an end for the Western Australian gold exploration company known as Apollo Consolidated. The company's largest shareholder and fellow bidding participant, Gold Roads, has announced it accepts Ramelius' revised offer, as published on 8 November 2021.
As a refresher, this offer consisted of 34 cents per Apollo share in cash and 0.1778 Ramelius shares per Apollo share. Additionally, this was a revised bid after Gold Road laid down a counteroffer of 56 cents per share. Upon receiving Ramelius' revised bid, Gold Road made it known it did not intend to improve upon its offer.
Following today's news, a second supplementary bidder's statement has been lodged with the Australian Securities and Investments Commission. Outside of these details, there wasn't much else shared regarding the next line of action.
What does Apollo consist of?
Apollo Consolidated is the owner of Lake Rebecca Gold Project in Western Australia. For a sense of location, it is 150 kilometres North-East of Kalgoorlie.
The project boasts 29.1 million tonnes of mineral resources at Rebecca at 1.2 grams of gold per tonne. That gives it an estimated 1.1 million ounces of pit-constrained mineral resources. Furthermore, the company cited in its presentation that the area remains relatively under-explored.
Next steps
Looking ahead, shareholders will likely need to wait for more information from Ramelius Resources. The company maintained a balance of $273.9 million in cash and gold at the end of the September quarter. However, management might choose to raise additional funds if the takeover receives the go-ahead.
The Ramelius Resources share price is still down 14% compared to this time last year.
