China’s Yintai outwits and out wages Dundee for Namibia’s next optimum gold mine
Osino Resources announced this week in its third annual Sustainability Report for 2023 that states that the acquisition of Twin Hill’s Gold project Yintai is soon to be a done deal.
Yintai has as a bonus provided Osino Resources with a timely loan comprising approximately (US$10 million) N$185,423,000 to facilitate and provide for the execution of the arrangement agreement to enable the continued, fast-tracked development of the Twin Hills gold project and to fund other liquidity needs of Osino.
The deal is backed up by China’s “own strong track record of international M&A’s. The report states.
This leverage of Yintai’s strong balance sheet and access to capital to fast-track development of the Twin Hills hostile takeover received a binding proposal from Yintai to acquire all of the issued and outstanding Osino Common Shares and notified DPM that this offer constituted a “Superior Proposal” by the terms of the DPM Arrangement Agreement.
The all-cash offer, providing value certainty and immediate liquidity to Osino shareholders is stated in the report as a “highly credible and capable counterpart in Yintai of US$5.6 billion market capitalization as a publicly traded company on the Shenzhen stock exchange.”
Following an immediate one-upper deal of desperate Foreign Direct Investment for Namibia.
The ample immediate cash extraction for Osino Resources of the said amount is for operations and working capital needs and the compensation in full of the termination fee paid to Dundee Precious Metals Inc. (DPM).
The Twin Hills Gold Project is located in a central area approximately 150 km northwest of Windhoek.
During 2023, Osino’s Namibian procurement spend was N$123 million (C$8.9 million). Additionally, Osino paid N$31.4 million (C$2.3 million) in wages and N$7 million (C$477k) to the Namibian government (social security, PAYE, workman’s compensation and training levy) Since 2017, Osino has invested a total of C$81 million (N$982 million) locally.
This amount is a counter-strike to the termination fee paid by Osino Resources following the termination of the DPM arrangement agreement which Yintai out-wavered.
The Chinese outbound investment is due to be approved by a pool of experts to be obtained in parallel with Namibian Competition Commission approval. DPM has notified Osino that it will not propose to amend the terms of the DPM Arrangement Agreement in light of the Yintai proposal and, as a result, Osino terminated the DPM Arrangement Agreement by its terms and entered into a deal with China’s Yintai.
Heye Daun, President and Chief Executive of Osino Resources, stated: “Whilst we were appreciative of the previous offer from DPM, the all-cash offer from Yintai represents a significant premium to the DPM offer price, thus is a superior proposal, and is an excellent outcome for Osino’s shareholders. Yintai is experienced, well-financed, and has a highly credible track record of gold mining in China, with the technical skills and financial resources to progress the project through construction and into production. We look forward to working with Yintai to continue to fast-track the development of the project and close this transaction.”
Yintai has a track record of successful Mergers and Acquisitions (M&A) including the US$600 million acquisition of Canadian-listed Eldorado Gold Corporation’s White Mountain (Jilin Banmiaozi) and Tanjianshan (Qinghai Dachaidan) Mines and Eastern Dragon (Heihe Yintai) Development Project in 2016 with significant support from its major shareholder, Shandong Gold, the report reads.
