[miningmx.com] — SHARES in Gold One International continued their recent rally on the JSE on Thursday, following a query by the Australian Stock Exchange (ASX) into possible corporate activity at the junior mining company.
Responding to the ASX’s questions, Gold One admitted it “is currently assessing a potential acquisition transaction, and also a potential change of control transaction for the company”.
This was in response to a question which read: “Is the company aware of any information concerning it that has not been announced which, if known, could be an explanation for recent trading in the securities of the company?”
The query was prompted by the 33% surge in Gold One’s share price since March 16 when it closed on A$0.32, compared to A$0.425 at the end of trading on Thursday. Trading on the JSE, where Gold One has a secondary listing, eventually caught up, with the price jumping 14% from 255c on Friday to 290c at the close of trading on Wednesday.
During early trade on Thursday, the share gained another 3.45% to R3.00.
Gold One further listed its recent operational figures which exceeded expectations, a positive response to a flurry of investor road shows and presentations as well as shareholder approval for the Goliath Gold transaction as contributing factors for the increase in demand from the market.
The group said earlier this month is was on track to exceed its first-quarter gold production target of 25,000oz, recording output of 18,154oz during January and February. This was followed by shareholder approval for the Goliath Gold deal on March 22.
Gold One has often been criticised for missing production targets. Despite paying a maiden dividend on the back of achieving profitability earlier than most commentators predicted, analysts said Gold One’s shares would only start to make meaningful gains once the company met target on successive occasions.
Said CEO Neal Froneman in an interview with Miningmx: “A lot of things have happened at the same time. The market have been waiting for developments which are now starting to unfold.’
Pointing to the pending finalisation of the Goliath Gold transaction, Froneman said Gold One’s share price has until recently not factored in any value for the Megamine property. The formation of Goliath would however crystallise R450m in value for shareholders.
“We knew the share would’ve started to climb at some stage,’ said Froneman. “The (Goliath Gold) transaction alone represents (almost) 25% of our market cap.’
Asked when Gold One would consider it necessary to issue a cautionary notice on possible corporate activity, Froneman said according to the policies of the Australian Stock Exchange the company would only have to disclose a transaction once a deal has been concluded and signed.
According to the statement to the ASX: “In the company’s view, all such transactions currently under contemplation are both confidential and not at a stage to warrant disclosure because of their incomplete nature.
“The company can give no assurance that any transaction will eventuate from those currently under contemplation.”
Investec Securities gave Gold One a target price of A$0.45 in a note dated March 18, while the UK’s Ambrian Partners envisaged A$0.47 for the share. Imara SP Reid said on Wednesday the share was fully valued.
