Battle for Twin Hills’ gold

A “foreign-based” investor has offered 368 million Canadian dollars, or more than N$5 billion, to buy all the outstanding shares in Osino Resources, owner of the Twin Hills Gold Project in Namibia.

That’s about N$1 billion more than Dundee Precious Metals (DPM) offered Osino when it entered into a definitive agreement with the Canadian-based gold exploration and development company in December.

Osino’s flagship project is Twin Hills, an open-pit gold project in central Namibia which is expected to start production by mid-2026. The mine has a 13-year life and average annual gold production of over 169 000 ounces of gold per year.

Osino yesterday issued a statement, saying it has received “a proposal from a foreign-based mining company”, and that its board has unanimously determined that the new offer is a “superior proposal” to that of DPM.

A loan facility of US$10 million or about N$190 million is part of the new offer Osino received. This will enable “the continued, fast-tracked development of the Twin Hills Gold Project and to fund other liquidity needs of the company”, Osino said.

The new prospective investor is also willing to advance in an amount equal to the termination fee payable by Osino in the event of a termination of the DPM arrangement agreement as a result of the new offer.

According to Cirrus Capital, the new offer roughly translates to N$26.70 per share. On Monday, Osino closed at N$19.47 per share on the Development Capital Board (DevX) of the Namibian Stock Exchange (NSX).



Dundee

Osino notified DPM that the new offer is being considered superior under the current agreement.

This triggered a five-business day period during which DPM could suggest changes to the existing agreement to potentially make it as appealing as the new offer. However, DPM was under no obligation to do so.

DPM informed Osino that it would not propose to amend the terms.

The company yesterday afternoon issued a statement saying if Osino terminates the agreement in favour of the new investor, it will have to pay DPM a termination fee of 10 million Canadian dollars.

DPM released its 2023 annual results last week, saying: “There is no certainty that the [Osino] acquisition will be completed in accordance with the terms of the current agreement, or at all.”

DPM also decided to undertake a strategic review of its Tsumeb Smelter in Namibia, including a potential sale of the asset, the company said.

“The smelter is no longer expected to process any Chelopech concentrate [from the copper mine in Bulgaria] commencing in 2024 and as a result, it is no longer seen as strategic to DPM's asset portfolio,” it said.

DPM acquired the Tsumeb Smelter in 2010 has owns 92% of the asset.

In its results for the year ended 31 December 2023, DPM lists the assets and liabilities of Tsumeb as “held for sale”.



‘Ready’

Osino and the new prospective investor “have confirmed their readiness and intention to execute the proposed arrangement agreement promptly following a termination of the DPM arrangement agreement”, Osino said yesterday.

“The company is in the process of settling logistical matters, including payment of the termination fee to DPM in anticipation of the termination of the DPM arrangement agreement in accordance with its terms,” Osino added.

In addition to the Twin Hills project, Osino also boasts the Ondundu Gold Project, situated 120 km north of Twin Hills.

Its Otjiwarongo Regional Project encompasses eight licenses to hunt for gold. In addition, Osino recently acquired an expansive new land parcel situated approximately 100 km east of Twin Hills, known as the Sandveld Project.

Osino also owns the Omaruru Lithium Project in collaboration with Prospect Resources Limited.