Takeover of Crescent Gold by Focus Minerals

Download full announcement here


  • Transaction to make Focus one of Australia’s Top 5[1] Gold Producers with a 230,000oz production target in 2012 from multiple open pit and underground operations
  • Focus offering one share for every 1.18 Crescent shares in an off-market bid
  • Offer represents 30.5% premium to Crescent’s last close price of $0.05 per share[2]
  • Crescent Directors unanimously recommend shareholders accept the offer, in the absence of a Superior Proposal
  • Pre Bid Agreement in favour of Focus for 19.9% of Crescent from Deutsche Bank group
  • Increased management depth and operational experience to maximise the value of Crescent’s assets
  • Combined group will have a JORC Resource inventory of 4.3Moz of gold[3]
  • Strong rerating potential with the merged proforma EV/Resource multiple at a 39% discount to the current peer average of A$107/oz
  • Significant synergies in combining two major West Australian mining regions: Focus’ established Coolgardie operations with Crescent’s significant open pit operations at the Laverton Gold Project
  • Combined group will have the financial strength to unlock Crescent’s extensive exploration upside across 1,400km2 of tenements

Focus Minerals Limited (“Focus”) [ASX: FML] and Crescent Gold Limited (“Crescent”) [ASX: CRE] are pleased to jointly announce that they have agreed to merge the companies by way of a conditional off-market takeover bid by Focus for all of the issued shares in Crescent (“Offer”).

The Crescent Board unanimously recommend the Offer, and intend to accept the Offer in respect of their Crescent holdings, in the absence of a Superior Proposal.

The transaction will make Focus one of Australia’s Top 51 gold producers with targeted annual production of 230,000oz, a combined JORC resource base of 4.3Moz of gold3, and outstanding growth potential across two major Western Australian mining regions.


Focus and Crescent have executed a Bid Implementation Agreement (“BIA”), under which Focus agreed to make the Offer. The consideration being offered to Crescent Shareholders is one Focus share for every 1.18 Crescent shares, which represents a premium of 30.5% to Crescent’s closing price on 17 June 2011[4].

The Offer is subject to customary conditions, including the following:

  • Minimum acceptance of 90%;
  • No Material Adverse Change; and
  • No prescribed occurrences.

The Offer conditions are set out in Schedule 2 of the BIA in Annexure C.  Full particulars of the Offer will be provided in the Bidder’s Statement.

The transaction has the support of Crescent’s major shareholder, Deutsche Bank AG who has agreed to accept the Offer in respect of a 19.9% stake in Crescent pursuant to a Pre-Bid Agreement with Focus.

At the closing price of Focus shares on 17 June 2011 of 7.7 cents per share, the Offer represents an offer price of 6.5 cents per Crescent share, representing a premium of 30.5% on the closing price of Crescent shares on 17 June 2011 of 5 cents per share, a 29.10% premium to the 5 day volume weighted average price (“VWAP”) of Crescent shares of 5.1 cents per share and a 20.75% premium to the 30 day VWAP of Crescent shares of 5.4 cents per share.

The Offer will be extended to any Crescent shares that are issued during the Offer period as a result of the exercise of Crescent options or conversion of convertible notes on issue before the Offer opens.  However, Focus also intends to enter into private treaty arrangements with Crescent option holders to acquire their options in exchange for Focus shares on a ratio determined by reference to the respective exercise price and expiry date of their options.


The Boards of Focus Minerals and Crescent Gold consider that the combination of the two companies will provide significant strategic and financial benefits to both sets of shareholders:

Mr Campbell Baird, Chief Executive Officer of Focus Minerals said:  “The merger of Crescent Gold and Focus Minerals provides a unique opportunity for both businesses to fast track their growth aspirations making Focus one of Australia’s Top 5  gold producers.

“Once this transaction is complete this creates a strong platform for both companies’ shareholders to benefit from a substantial value uplift from a significant increase in combined production, a doubling of gold resources, and the ability to step up exploration within Crescent’s extensive landholding”, Mr Baird said.

Mr Mark Tory, Managing Director of Crescent Gold said:  “The Board of Crescent Gold considers the transaction to be a compelling opportunity for Crescent Shareholders to capture a premium for their shareholding and become part of a major new Australian gold producer.  Post-acquisition, Crescent shareholders will be part of an entity with an exciting production and exploration growth profile, strong balance sheet, diversified asset portfolio, and a strong track record in mine operations.”

Key compelling benefits for both Focus Minerals and Crescent Gold shareholders include:

  • Creates a Top 5 Australian Gold Producer – With a targeted annual production of 230,000oz in 2012 and outstanding growth potential across two major Western Australian mining regions, the combined company will become a top 51 Australian gold producer.
  • Proven Track Record of Mine Operation – Focus has a deep management team with proven development and mine operation capabilities, having recommissioned the Three Mile Hill processing plant 18 months ago and opened two new mining operations in the last three months. Focus will use this operational expertise to maximise the value of Crescent’s assets.
  • Significant Resource Growth Potential – The combined group will have a very significant JORC Resource inventory of 4.3Moz3.  Both the Laverton and Coolgardie regions have demonstrated the opportunity for significant resource growth on targeted exploration programmes.  Focus brings the immediate funds to accelerate exploration at Laverton, with strong group revenues providing a basis to fund further exploration to expand group resources.
  • Strong Operating Cash Flows – The transaction will create a combined group with very strong anticipated operating cash flow.
  • Valuation Uplift – The implied EV/Resource ratio of the combined entity is A$66/oz which is a 39% discount to the ASX listed gold producers average of A$107/oz, implying a significant opportunity for a revaluation of the combined group.


The Board of Directors of Crescent has unanimously recommended that, in the absence of a Superior Proposal all Crescent shareholders accept the Offer, and all directors intend to accept the offer.

Pursuant to the BIA, Focus and Crescent have agreed customary exclusivity arrangements, including “no shop” and “no talk” provisions. The BIA also confers a matching right on Focus.  See Annexure C for a copy of the BIA.

Focus has entered into a pre-bid acceptance agreement with Crescent’s major shareholder, Deutsche Bank group, which through its wholly owned subsidiary Gulara Pty Ltd owns 29.23% of Crescent. The pre-bid agreement is in respect of 19.9% of Crescent. Separately, Focus has also been informed by Deutsche that its present intention is to accept the Offer in respect of the remaining 9.33% of Crescent shares it holds, no later than five days prior to the end of the Offer period, subject to there being no Superior Proposal.   Deutsche Bank has no obligation to accept the Offer in respect of the remaining 9.33% stake and may dispose of these shares to a third party at any time.


In May 2011 Focus provided a $3 million secured loan to Crescent which upon shareholder approval will turn into a convertible note.  Once approved, that convertible note will be convertible into Crescent shares at the conversion price of the lower of $0.05 and 85% of 5 day VWAP of Crescent shares, with 1 free attaching option for each two shares provided.

In addition, on 17 June 2011, Focus provided a $10 million working capital facility to Crescent, which subject to shareholder approval, may be converted into convertible notes.  These convertible notes will be convertible to Crescent shares on substantially the same terms as the May 2011 convertible note.


The indicative timetable in relation to the Offer is set out below.

Monday, 20 June 2011

Announcement of Transaction

Monday, 4 July 2011

Focus lodges its Bidder’s Statement with ASIC and ASX and serves it on Crescent

Monday, 4 July 2011

Crescent lodges its Target’s Statement with ASIC and ASX and serves it on Focus

Thursday, 7 July 2011

Joint despatch of Bidder’s Statement and Target’s Statement

Thursday, 7 July 2011

Offer Opens

Monday, 8 August 2011

Close of Offer (unless extended)


Focus’ corporate adviser is Hartleys Limited and its legal advisor is Mallesons Stephen Jaques. Crescent’s corporate adviser is Gryphon Partners and its legal advisor is Blakiston & Crabb.

[1] Top 5 based on forecast production volume comparing annual production targets in CY12 of 100,000oz for Crescent and 130,000oz for Focus, as compared to CY11 production targets of other ASX primary listed gold producers.

[2] Based on Focus’ last close price of 7.7 cents per share on 17 June 2011.

[3] Combined JORC Resource of 4.3Moz, based on latest Resource statements from both Companies.  As at 31 March 2011, Focus had a reported JORC Resource of 26.5Mt @ 2.6g/t for 2.25Moz.  As at 30 June 2010, Crescent had a reported JORC Resource of 30.5Mt @ 2.08g/t for 2.08Moz

[4] Based on Focus’ last close price of 7.7 cents per share on 17 June 2011.

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