Übernahmekampf um Aragon Res AAG:ASX ?

Westgold has had preliminary discussions with the Aragon Board of Directors regarding the
concept of a takeover offer. Westgold understands that the Board of Aragon will reserve its
decision concerning its recommendation on the offer pending receipt of an Independent Expert’s
Report.
The offer is aimed at creating a gold-focussed and growth-orientated company based on the
development of two major mining centres, Rover at Tennant Creek in the Northern Territory and
the Central Murchison Gold Project in Western Australia, filling a growing gap on the Australian
share market.
Aragon is a Western Australian-based gold explorer in which Westgold has maintained a major
shareholding since spinning the company off in August 2007 to focus on Westgold’s non-core gold,
nickel and uranium exploration assets.
In early 2010, Aragon acquired the Central Murchison Gold Project and has progressively
advanced the project from a resource base of 1.5Moz gold to the current 2.0Moz gold. Aragon has
established an initial Mining Reserve Estimate of 614,000 ounces for the first phase of its planned
underground mining developments at Big Bell and Day Dawn.
This takeover offer reflects Westgold’s view in the quality of these new gold assets. Westgold’s
major 32% shareholder, Metals X Limited (ASX:MLX), also holds a direct 8.7% shareholding in
Aragon.
Profile of the Consolidated Company
The consolidated company will have a pro-forma market capitalisation of $135 million based on a
total share capital of 414 million shares and the closing WGR share price on 4 February 2011 of
$0.325.
Westgold shareholders will hold 59.9% and Aragon shareholders 40.1% of the combined group.
Metals X, as Westgold’s major shareholder will hold 22.5% of the combined group.
The consolidated entity will have a well-funded gold-copper development strategy, with combined
cash reserves of $21.3 million as at 31 December 2010, two major development projects and
significant polymetallic exploration upside, namely:
* the exciting development of the Rover-1 Gold-Copper Project, located south west of Tennant
Creek in the Northern Territory, with 1.04Moz of gold-equivalent resources, a Feasibility Study
underway and a resource update pending;
* the growing Central Murchison Gold Project in Western Australia, with 2.0Moz of gold
resources and development studies underway;
* the exploration upside at Rover on a number of “look alike” IOCG targets, including Explorer
142 currently under evaluation and additional base metals projects, including the Explorer 108
Pb-Zn-Ag resource and McArthur Basin joint venture;
* additional exposure to nickel exploration in the Kambalda region of Western Australia and a
significant phosphate investment.
Following completion of the takeover offer, Westgold intends to invite two directors of Aragon to
join its Board, including the current Aragon CEO.
Benefits to shareholders
The Board of Westgold believes the consolidated group will provide significant shareholder value
to both Westgold and Aragon shareholders. The combined company will have:
* An increased resource base of 3Moz-equivalent of contained gold with a reserve of 0.6Moz of
contained gold, making Westgold internationally significant;
* A development pipeline targeting an initial combined annual production of 200,0000oz gold
equivalent within 5 years;
* A dual-focus development and production strategy, with copper and other base metals in the
portfolio;
* Two large exploration portfolios, one a “virgin” IOCG province with numerous untested targets
and the other covering three proven goldfields with combined past production of 5.0M ounces
of gold;
* A larger company, with a stronger balance sheet and expected market capitalisation of over
$135 million, providing greater liquidity and access to new investors;
* Strengthened technical expertise across exploration, project development and mining;
* Greater market liquidity;
* Combined cash reserves of approximately $21.3 million to support near-term project funding;
* Simplified corporate structure and cross-directorships;
* Removal of cross-ownership issues;
* Cost and resourcing efficiencies with a larger combined entity; and
* Ability to better and more rapidly explore the resulting high quality exploration portfolio.
Westgold Managing Director Andrew Beckwith, said:
“Our stated corporate goal has been to become an Australian mid-tier gold producer within five
years, targeting production of 200,000 ounces of gold equivalent per year. This acquisition is
entirely consistent with that growth objective, providing the substantial and growing resource base,
the flexibility of developing two major mining operations to provide a long life production profile, a
strengthened technical team, stronger balance sheet and excellent growth potential from two large
exploration landholdings in world-class prospective regions – both within Australia.”
It is expected that, subject to Westgold acquiring 80% or more of Aragon’s total share capital,
capital gains tax (CGT) rollover relief is likely to be provided to Australian tax residents who accept
the offer.
In its deliberation and subsequent voting on the takeover offer, the Board of Westgold excluded
Peter Cook due to a potential or perceived conflict of interest because he holds a position on both
Boards. Similarly, the Westgold Board excluded Warren Hallam and Paul Cmrlec due to potential
or perceived conflicts of interest given their respective positions as Managing Director and
executive at Metals X, the major shareholder in Westgold (31.99%) and significant shareholder in
Aragon (8.70%). Mr Cook has also advised that he will inform the Board of Aragon that he will
need to be excused from all deliberations in relation to the takeover bid.
Offer conditions
The offers are subject to a number of conditions as set out in Appendix F, including the following:
* Minimum acceptance of 90% for the Share Offer;
* The Option Offer is conditional upon the Share Offer being successful;
* The Option Offer is conditional upon obtaining relevant ASIC relief. In the event of this relief
not being granted by ASIC then Westgold proposes to acquire the Aragon options by way of
private treaty;
* No material adverse change and no prescribed occurrences; and
* No change of control rights.
Full details and definitions in regard to the terms and conditions of the offers will be included in
Westgold’s Bidder’s Statement.
Indicative timetable
The indicative timetable to the offer is shown below:
Monday 7 February 2011 Takeover Announcement lodged with ASX
Tuesday 15 February 2011 Westgold lodges its Bidder’s Statement with ASIC, ASX & Aragon
Tuesday 1 March 2011 Westgold despatches its Bidder’s Statement to Aragon’s shareholders
Tuesday 1 March 2011 Offer period opens
Monday 4 April 2011 Offer period closes (unless extended)
Advisers and contacts
Westgold is being advised on legal matters by McKenzie Moncrieff Lawyers.
For further information please contact:
Andrew Beckwith Andrew Chapman
Managing Director Company Secretary
Westgold Resources Limited Westgold Resources Limited
Tel: (08) 9326 5700
Media Inquiries:
Paul Armstrong / Nicholas Read
Read Corporate
Tel: (08) 9388 1474