Explaurum Limited Provides Misleading Statement In Its Target Statement To Ramelius

Ramelius Resources Limited (ASX:RMS) sent an application to the Panel to share the information about the activities going at Explaurum Limited. RMS is currently bidding for 100% shares of Explaurum for consideration of 1 Ramelius share for every 4 Explaurum shares. At present Explaurum is currently the subject of an off-market takeover.

On 10 September 2018, Ramelius announced the takeover bid of the Explaurum. After this Explaurum issued its estimate on 12 October 2018. After the evaluation, Ramelius submits the list of various undervalued statements made by Explaurum which appears non soundly and requires Panel’s guidance as per note 22. The Tampia Gold Project valuations provided by Explaurum are made without an objectively reasonable basis which contradicts to the principles provided in the ASIC’s Information Sheet 214, mining and resources and its forward-looking statements. The target’s statement provided by Explaurum have many misleading statements in it. As a result of this there is a situation where RMS submits regarding the material failure by Explaurum to comply as per the disclosure in the chapter 6 of the Act and are contrary to the policy objectives of section 602 of the Act. This has resulted in doubtful situation where takeover bid made by applicant is not taking place in an efficient, competitive and informed market. Also, the shareholders of Explaurum will not be provided with ample information which will enable them to access the merits associated with the Applicant’s takeover bid.Â

Now, Ramelius is trying to seek interim orders that prohibits Explaurum from any further reiterating any undervalue statement or other statement in regards to the subject of the application. Also, RMS is trying to seek orders against Explaurum for providing supplementary target’s statement with information deficiencies and misleading statements.

The overall performance of the company since inception is -23.50%. The one year, 5 years and 10 years performance of the company is 14.67%, 208.31% and 18.66%. For the year ended 30 June 2018, the company showed an increase in revenue from ordinary activities by 73% i.e. approximately A$341.784 million. Net profit before tax has gone up by 82% equivalent to A$45.499 million. The net profit after tax has gone up by 74% which is equivalent to A$30.760 million and this was attributable to the members of the company. Also, the company did not pay any dividend in that financial year. The net assets (total asset – total liabilities) of the company is $201.972 million indicating that the company is in a position to meet its long term obligations. As per the balance sheet, the working capital of the company is positive showing the operational efficiency of the company and its ability to meets its short term financial health.

The current market price of the share is A$0.435 (AEST: 4pm) with market capitalization of A$227.3 million and PR ratio 7.36x. As per the chart, the moving average convergence and divergence line (MACD line) is touched the signal line a couple of days back and is now moving in the downwards direction. This shows that prices may be bearish in nature.

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