Engineers & Planners launches cash offer for Cardinal Resources' interest in Ghana

Engineers & Planners, the Ghanaian based business has joined the battle to buy out Perth in Australia based Cardinal Resources, topping previous bids for the gold explorer with a new cash offer of $1.05 per share.

Engineers & Planners on Tuesday, November 24, 2020 formally launched the all cash offer in Cardinal Resources in order to obtain the company's mining interest in Ghana.

Announcing the conditional all cash, off-market offer in a press release issued Tuesday, Engineers & Planners said it was pleased to acquire all of the ordinary shares in Cardinal.

The consideration of a $1.05 per share (the offer price) for the shares of Cardinal on ASX is "5% higher than both recently revised Nord Gold and Shandong Gold Mining Offers of $1.00," E&P said.

E&P had previously noted that with the acquisition of Cardinal's Namdini project, the company could deliver a Ghanaian owned modern mining project to help create thousands of jobs and maximise Ghanaian revenues.

A previously completed feasibility study estimated that Namdini would produce some 4.2million ounces of gold over a mine life of 15 years, with an estimated 1.1million ounces expected over the first three years of the operation.

Namdini is expected to cost $390million to develop.

The offer values Cardinal at A$564,764,139.50 based on 100% of the ordinary equity on issue, Engineers & Planners said in the press release issued by its Business Development Director, Emmanuel Erskine

It said the Offer represents a compelling opportunity for Cardinal shareholders to realise value and stimulate ownership of Ghanaian natural resources by a 100% Ghanaian owned entity.

Engineers & Planners is a 100% Ghanaian owned Mining and Construction company, headquartered in Accra, Ghana, with a 22 year track record of mining contracting and operational excellence in West Africa.

E&P employs 3,000 mainly Ghanaian team members.

Currently Engineers & Planners is contracted to two of the major gold mines in production in Ghana.

Engineers & Planners' formal Offer period commenced on November 18, 2020 and will be open until the close of trading (4pm Sydney time) on December 31, 2020, unless extended or withdrawn in accordance with the Corporations Act 2001 (Cth).

Background to the offer

The Consideration of A$1.05 per share (the "Offer Price") represents a 59% premium to the Binding Offer E&P made on June 3, 2020 to the Board of Cardinal Resources Ltd for the Ghanaian gold mining assets.

This new, revised offer, this time for the shares of Cardinal on ASX, is 5% higher than both the recently revised Nordgold and Shandong offers of A$1.00.

Why E&P's Offer should be accepted over the rival Offers?

The press release said "Not only do E&P offer the best price for your shares, we are also a proud Ghanaian company, 100% owned by Ghanaians, and in the words of the CEO of Cardinal in a communication between us: "It’s great to see a Ghanaian Company raise their hand and show an interest in what will be Ghana’s next multimillion-ounce gold mine". Mr Archie Koimtsidis said on April 27, 2020.

"We are committed to operating in Ghana specifically, and West Africa generally, and have project development expertise and financial backing for the successful construction and commissioning of the Namdini project, to the benefit of the local community and all stakeholders. The Namdini Gold Mine and Cardinal's Bolgatanga assets are in our ancestral area and we have intimate knowledge of the local communities, customs and urgent needs of our fellow Ghanaians," it added.

The Government of Ghana has recently unambiguously stated that they want Ghanaian companies to own its prized natural resource assets.

To emphasize this Ghana Infrastructure Investment Fund ("GIIF") recently took over the debt facility originally extended to Cardinal Resources Ltd by Sprott of Canada.

"We applaud this development and Engineers & Planners is now extending this goal by seeking to acquire one of the most promising gold mining assets in Ghana," E&P said.

This offer, which will be subject to obtaining all usual and necessary approvals, including regulatory approvals in Australia (FIRB) and Ghana (including clarifications on the mandatory 10% free carry equity participation of the Republic of Ghana in the Ghanaian companies holding the mining licenses, and tax treatment of change of control issues for corporate income tax), will support national asset development. Engineers & Planners is a local business with on the ground resources to start this project immediately, without delay, which will be considerably faster than any international third parties. Engineers & Planners is delighted to support Ghana with jobs for the local workforce; taxes for the benefit of the government; and local Ghanaian ownership.

Writer's email: enoch.frimpong@graphic.com.gh 

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