LONDON - Metals Exploration PLC (AIM: MTL), a mining exploration and production company, has announced a potential acquisition offer for Condor Gold plc, as per a statement released on Monday. The possible offer includes a fixed consideration and contingent value rights (CVRs) tied to future gold discoveries at Condor's projects.
Each Condor shareholder would receive 4.0526 new Metals Exploration shares and 9.9 pence in cash for each Condor share they own, valuing Condor's existing issued share capital at approximately £67.5 million. This valuation translates to roughly 33.0 pence per Condor share based on Metals Exploration's closing share price on November 29, 2024.
In addition to the fixed consideration, Condor shareholders would be entitled to CVRs, granting them a proportionate share of future proceeds from additional gold resources discovered at Condor's La India, Rio Luna, and Estrella projects, subject to a cap. The CVR Consideration could potentially reach US$28.8 million, approximately £22.6 million, adding an estimated 11.1 pence per Condor share to the offer.
However, the company has clarified that this announcement does not confirm a definitive intention to make an offer under the City Code on Takeovers and Mergers, and there is no assurance that a firm offer will be made.
Alongside the possible offer details, Metals Exploration has secured an irrevocable undertaking from Galloway Limited, owned by Condor's Non-Executive Chair Jim Mellon, to support the acquisition. This commitment covers Galloway's entire holding of Condor shares, representing approximately 24.7% of Condor's issued share capital, plus additional shares from warrants.
The irrevocable undertaking is contingent on Metals Exploration announcing a firm acquisition by 5:00 p.m. on December 4, 2024. It also includes provisions for Galloway to oppose any competing transaction that could interfere with the potential offer.
The possible acquisition reflects Metals Exploration's strategic interest in expanding its portfolio through Condor's gold projects. The company reserves the right to revise the offer terms or introduce different forms of consideration.
This potential transaction is subject to various conditions, including regulatory approvals and further due diligence. Investors are advised that the information is based on a press release statement, and further announcements will be made as developments occur.
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