Gold Road to acquire 100% of DGO Gold Limited

Gold Road Resources (ASX:GOR) is offering 2.25 shares for every 1 share held in DGO Gold (ASX:DGO) to the latter’s shareholders as part of a compulsory acquisition. 

Gold Road already holds a relevant interest of 95.14% of DGO shares and is now stepping in to acquire 100%. 

DGO shares will be suspended from trading for the next five business days. 

As of 11AM AEST, GOR shares are worth $1.19; DGO shares are paused at $2.93. 

Shareholders agreeing to the offer will receive GOR shares worth $2.67 for every share held in DGO. 

A look at Gold Road's capital structure (cash at at 31 March 2022)

Move in works since April 

Gold Road announced its intentions to conduct an off-market takeover to acquire all shares in DGO Gold back in April this year. 

Gold Road must move to a compulsory acquisition of DGO regardless, but shareholders of the latter can acquire Gold Road shares quicker by accepting the offer. 

The offer deadline is June 30. 

Golden Road also notes DGO shareholders “may not be able to sell their DGO shares on-market after 1 July 2022,” when DGO is likely to be suspended from the ASX.

Compulsory acquisition paperwork has been lodged with ASIC. 

What will DGO shareholders be picking up? 

Gold Road Resources’ flagship asset is the Gruyere gold project in Western Australia, held in a 50/50 JV with South African multinational Gold Fields.

The company produces and sells gold and consistently pays dividends. 

Gold Road holds stakes in a number of other WA players. Broken down, those are: 

• De Grey Mining (ASX:DEG) at 14.4%

• Dacian Gold (ASX:DCN) at 6.8% 

• Yandal Resources (ASX:YRL) at 20.1%

DGO expects full 2022 calendar year gold production to sit between 300k and 340k ounces of gold. 

Gold Road's three month performance compared to the materials index