Evolution better fit than Zijin: Phoenix boss THE AUSTRALIAN...

Evolution better fit than Zijin: Phoenix boss

• THE AUSTRALIAN
• JUNE 24, 2015 12:00AM

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Paul Garvey

Resources Reporter
Perth
https://plus.google.com/109921586420225671648

Phoenix Gold, which has rebuffed Zijin’s bid, says it favours Evolution Source: News Corp Australia
Takeover target Phoenix Gold has talked up its relationship with potential suitor Evolution Mining, noting that Evolution represents a better fit for Phoenix’s assets than rival bidder Zijin Mining.
Phoenix yesterday decided to cancel a proposed share placement to Evolution hours before its shareholders were due to vote on the alliance and share issue, clearing the way for an effective auction of the gold explorer.
China’s Zijin on Monday formally lodged an unsolicited 10c per share offer for Phoenix, valuing the target at $47 million. The offer was conditional on the Evolution placement not being approved at yesterday’s meeting.
Phoenix executive chairman Dale Rogers told The Australian the company had decided to cancel the proposed Evolution placement rather than defer the vote after discussing the options with Evolution.
“Realistically, simply deferring it would have introduced a level of doubt and perhaps uncertainty that we didn’t see any point of having,” Mr Rogers said.
“We would rather it be simple and clean so people know what’s going on.”
Proxy votes released after the meeting showed that the Evolution placement would have been narrowly approved, although the numbers did not include a substantial package of shares that Zijin could have potentially voted against the deal.
The move to scrap the placement clears the way for a potential auction of the company, with Phoenix having already dismissed Zijin’s offer as too low.
Zijin is aiming to process gold from Phoenix’s ground through its nearby Paddington mill.
Evolution is the obvious counterbidder, given it already holds just over 9 per cent of Phoenix and recently bought the Frog’s Leg goldmine and processing plant next to Phoenix’s ground.
Speaking at yesterday’s shareholders’ meeting, which saw advisers to Zijin and Evolution outnumber actual Phoenix investors, Mr Rogers said the Phoenix board had viewed Evolution’ alliance proposal “very favourably” and had “a great deal of respect” for Evolution and its board.
Mr Rogers said Phoenix’s relationship with Evolution remained “very strong” and Frog’s Leg represented the natural destination for ore from Phoenix’s deposits.
“The tenements fit together hand in glove, they literally wrap around each other, they are the closest milling solution to our reserves and resources, they’re half the distance that the Paddington mill is, and (Frog’s Leg) is also the newest mill in the region,” Mr Rogers said.
He said Phoenix had already had other parties approach it in the wake of Zijin’s 10c bid on Monday. “It is evident the bid was on the low side and people have taken that view,” he said. “We haven’t had to work the phones, they’ve been calling us.”
Shares in Phoenix fell 0.8c to 10.2c yesterday.