Avesoro Resources main shareholder submits takeover bid

The Youga gold mine in Burkina Faso. (Image courtesy of Avesoro Resources)

West Africa-focused gold miner Avesoro Resources (TSX, AIM:ASO) said on Tuesday it had received an expression of interest from its majority shareholder, Avesoro Jersey Limited (AJL), which wants to acquire the shares in Avesoro it doesn’t already own.

Avesoro Jersey, which has a 72.9% stake in the takeover target, has offered £1 (about $1.20) per share of Avesoro Resources, saying that shareholders who own 12.9% of the company have already supported the move.

The Canada-based gold producer said it had formed a special committee, comprising all of its independent directors, to conduct a detailed review and analysis of the offer. They will be helped by legal counsel and financial advisers.

Avesoro Resources also said it’s currently assessing the long-term viability of its Burkina Faso Youga gold mine

Avesoro Resources said it was now assessing the long-term viability of its Youga gold mine in Burkina Faso, adding it had suspended guidance due to ongoing problems both at that mine and at New Liberty, in Liberia.

Earlier this month, a security guard at Youga shot and killed an illegal miner found on the premises, which led to a break-in by an armed group of fellow artisanal miners.

The Toronto-based miner had to halt operations as a precautionary measure, but said last week the site had been secured, adding that it had resumed mill and mining operations.

A non-determined number of haul trucks, excavators and auxiliary equipment within Youga’s heavy mining equipment fleet were damaged beyond repair, the company noted.

Operations at its New Liberty mine won’t restart until the beginning of September due to heavy rainfall flooding the pit. Previously, the firm had expected a delay of only about 10 days. As a result, gold shipments from the mine in August will be less than 1,000 ounces, it said.

The outlined disruptions at both mines meant full-year gold output and cost guidance was under review, Avesoro warned. “Previous guidance is suspended pending that review,” it said.

The miner had aimed to produce between 180,000 and 200,000 ounces of gold for the year.

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