Bullabulling Gold: 'Norton Gold Fields Cash Offer Inadequate & Opportunistic'
Bullabulling is fighting back.
In a formal announcement to shareholders, Bullabulling Gold Limited rejected Norton Gold Fields’ cash offer, calling it ‘inadequate and opportunistic.’ Norton Gold had offered 7 cents cash for every Bullabulling Gold share.
Norton chief executive Dianmin Chen said Bullabulling shareholders needed to be realistic about their company’s ability to raise capital and develop their flagship gold project, which is near Coolgardie in Western Australia.
''They don't have money to pay the drillers, they don't have money to pay the directors, how can they have money to pay the feasibility study without substantially diluting the shareholders value,'' he said.
''The shareholders of Bullabulling should really understand what the existing management can do with the project, and without substantial changes I think the project would be very difficult to get off the ground and to get into operations.''
Bullabulling dismissed the comments and recommended its shareholders do not accept the deal. Almost 42 percent of shareholders have reportedly pledged to reject the offer.
The company’s managing director Brett Lambert said there are still key milestones to be achieved within the next year that should make the stock more attractive to investors.
Shares in Bullabulling have been trading above the 7 cents mark for several days, suggesting the market expects an improved offer from Norton soon. Bullabulling hopes to report a reserve of about 2.5 million ounces of gold.
In the announcement, Bullabulling noted its share price is trading at a premium to the Norton offer price on both the ASX and AIM. The company is currently preparing its Target’s Statement in response to the offer and Bidder’s statement.
Bullabulling Gold Limited is a mining company focused on the exploration and production of gold in Western Australia.
The company plans to complete its definitive feasibility study by March 15.