Ramelius Resources : Makes Recommended Takeover Offer for Apollo Consolidated

Published: 2021-10-18 04:26:40 ET RMS.AX

Ramelius Resources Limited (ASX: RMS) (Ramelius) and Apollo Consolidated Limited (ASX: AOP) (Apollo) are pleased to announce that they have entered into a Bid Implementation Agreement (BIA), pursuant to which Ramelius will offer to acquire all the issued ordinary shares of Apollo by way of an off-market takeover offer (the Offer).

Under the terms of the Offer, Apollo Shareholders will receive cash consideration of $0.34 and 0.1375 Ramelius shares for each Apollo share held (Offer Consideration).

The Offer Consideration values each Apollo share at $0.56 (Offer Price), based on the 3 day volume weighted average price (VWAP) of Ramelius shares up to and including 15 October 2021 of $1.60, and implies a total equity value for Apollo of approximately $163 millionRamelius Makes Recommended Takeover Offer for Apollo Consolidated

Highlights

Ramelius to acquire Apollo Consolidated Limited (Apollo), 100% owner of the Lake Rebecca Gold Project (Lake Rebecca) in Western Australia, via a recommended off-market takeover offer (Offer)

Located in Australia's premier gold province and with a current total Mineral Resource estimate of 29.1 Mt @ 1.2 g/t for 1.1 million ounces1, Lake Rebecca provides a highly attractive platform for the potential future development of a new production centre for Ramelius

Ramelius has the financial capacity, operational experience and exploration expertise to continue expanding the existing Mineral Resource and to develop Lake Rebecca, in order to maximise the value of the asset for both sets of shareholders

Apollo shareholders to receive an implied Offer price of $0.562 per share (Offer Price), comprising $0.34 in cash and 0.1375 Ramelius shares per Apollo share

The Offer Price implies an enterprise value for Apollo of $128 million3 , a 37.0% premium to the enterprise value implied by Apollo's 3 day VWAP of $94 million4

Apollo's Directors unanimously recommend Apollo shareholders accept the Offer, in the absence of a superior offer

Apollo Directors and management have entered binding agreements to accept the Offer for all the shares they own or control (representing 13.7% of Apollo's issued shares) within 7 days of the Offer opening, in the absence of a superior offer

The Offer is subject to a 90% minimum acceptance by Apollo shareholders

Ramelius and Apollo will host a joint investor call at 8:00am AWST / 10:00am AEST/ 11:00am AEDT on Monday 18th October 2021. To listen in live, please click on the link below and register your details: https://s1.c-conf.com/diamondpass/10017445-mdg0ce.htm

The Offer Price implies an enterprise value for Apollo of $128 million4 , a 37.0% premium to the enterprise value implied by Apollo's 3 day VWAP of $94 million4 . The cash component of the Offer Consideration, representing a total of $99 million, will be funded from Ramelius' existing cash reserves of $234 million (including gold bullion) as at 30 June 2021.

Apollo Board Recommendations

The Apollo Board of Directors unanimously recommend that Apollo shareholders accept the Offer, in the absence of a superior offer. Apollo's Directors and management have entered into binding agreements to accept the Offer in respect of all Apollo shares they own or control (representing 13.7% of Apollo's issued shares) within 7 days of the Offer opening, in the absence of a superior offer.

Key Benefits for Apollo Shareholders The benefits of the Offer to Apollo Shareholders include: 1. Highly attractive premiums o The Offer Price represents an attractive and substantial premium to recent trading in Apollo shares, as set out above o The Offer Price also implies an enterprise value for Apollo that is at a significant premium to the enterprise value implied by market trading in Apollo shares, also as set out above 2. Certain cash consideration and optionality in relation to scrip consideration o The Offer Consideration includes a material cash component of $0.34 per Apollo share, providing Apollo shareholders with the certainty of cash for over 60% of the total Offer Price o In relation to the scrip component of the Offer Consideration, Ramelius encourages Apollo shareholders to retain Ramelius shares they receive. However, should Apollo shareholders wish to sell their Ramelius shares, they are significantly more liquid than Apollo shares, providing enhanced investment flexibility in relation to this decision 3. Significant reduction in development risk o As shareholders in a single asset company, Apollo shareholders are currently subject to significant uncertainty and risks arising from the potential development of the Lake Rebecca Project (Lake Rebecca or the Project) o Risks currently faced by Apollo shareholders include labour shortages and inflationary pressures being experienced in the WA labour market, and the associated challenges of establishing a team with the required skills and experience to develop Lake Rebecca into an operating mine o In contrast, Ramelius has two existing operations in WA and an established workforce with strong operational and development experience, putting Ramelius in a relatively stronger position to develop the Project and maximise its value for the benefit of shareholders o Accepting the Offer will allow Apollo shareholders to significantly reduce their exposure to the risks associated with potential development of the Project 4. Avoidance of potential future equity dilution o Given the Project's current early stage of development, any decision by Apollo to fund the development of the Project is likely to lead to future equity dilution of Apollo's existing shareholders o In contrast, Ramelius is in a strong financial position and, with two existing cash generating operations, has additional borrowing capacity to provide alternative funding sources to develop Lake Rebecca without dilution of shareholders o Accepting the Offer will allow Apollo shareholders to avoid the likelihood of equity dilution associated with a future development decision on the Project 5. Opportunity to become a shareholder in Ramelius o Apollo shareholders who decide to retain Ramelius shares forming part of the Offer Consideration will become shareholders in a financially strong, dividend paying, ASX200 gold producer with two existing operations in WA, a proven management team and a track record of growth and shareholder returns o The addition of a high-quality development asset such as Lake Rebecca is consistent with Ramelius' growth strategy and highly complementary to Ramelius' existing portfolio of operational assets 4

Rollover relief in relation to scrip component of Offer Consideration o Provided Ramelius acquires at least 80% of Apollo's ordinary shares under the Offer, capital gains tax rollover relief will be available to Apollo shareholders on the portion of the Offer Consideration paid in Ramelius shares.

Contact:

Mark Zeptner

Tel: +61 8 9202 1127

About Apollo Consolidated Limited

Apollo Consolidated Ltd (ASX:AOP) is a gold exploration company based in Perth, with its exploration focus being in the Eastern Goldfield of Western Australia. Here, the Company holds the wholly owned, advanced gold project at Lake Rebecca, greenfield gold projects at Yindi and Larkin, as well the Louisa nickel-copper sulphide project located in the Kimberley. Lake Rebecca is developing into an exciting new Goldfields discovery, with three main prospect areas, Rebecca, Duke and Duchess. Rebecca is the site of the high-grade Jennifer Lode discovery and adjoining mineralised surface, and the Apollo continues to explore this deposit and surrounding targets. In February 2020, Apollo declared a combined 1.0 million ounce Mineral Resource at the Lake Rebecca Gold Project, across three deposits and wholly constrained within optimised pit shells. The flagship Rebecca deposit contributes 775,000 ounces, of which 550,000 ounces were at Indicated category. Subsequent to this and as announced on 20 April 2021, the Mineral Resource estimates were revised for the Rebecca, Duchess and Duke deposits following infill and step-out RC and diamond drilling completed in 2020. Total combined in-pit Mineral Resources now stands at 29.1 million tonnes at 1.2g/t Au for 1.1 million ounces of gold, 74% of which is at Indicated status.

About Ramelius Resources Limited

Ramelius Resources Limited (ASX:RMS) is a Western Australian gold producer that has been listed on the ASX since 2003 and in production since 2006. Ramelius owns and operates the Mt Magnet, Edna May, Vivien, Marda, Tampia and Penny gold mines, all of which are located in Western Australia. Ore from the high-grade Vivien underground mine, located near Leinster, is hauled to the Mt Magnet processing plant where it is blended with ore from both underground and open pit sources at Mt Magnet. The Penny project is currently under development with first ore in late FY22. The Edna May operation is currently processing high grade underground ore, low grade stockpiles, as well as ore from the satellite Marda open pit mines. Ore feed from the Tampia open pit mine commenced in early FY22. Ramelius reported excellent financial and operational performance for Financial Year 2021. The Company reported Net Profit after Tax of A$127M, the seventh consecutive annual profit, with a fully franked dividend of A$0.025 per share paid to eligible shareholders. As at 30 June 2021, Ramelius had A$234M in cash and gold, with no debt