Southern Cross Gold Directors Unanimously Support Acquisition Scheme by Mawson Gold
SOUTHERN CROSS GOLD LTD (SXG) Share Update November 2024 Tuesday 12th
Southern Cross Gold Directors Recommend Shareholders Vote for Scheme
Southern Cross Gold Limited's board has unanimously recommended that shareholders vote in favor of a proposed scheme of arrangement, which would see Mawson Gold Limited acquire all shares not already owned by Mawson.
Instant Summary:
- Directors unanimously recommend voting in favor of the Scheme.
- Scheme involves acquisition by Mawson Gold Limited.
- Independent Expert deems the Scheme in shareholders' best interests.
- Scheme subject to court and shareholder approval.
- Potential for enhanced access to capital markets post-acquisition.
Background and Proposal
Southern Cross Gold Limited (SXG) has announced a proposed scheme of arrangement, recommending shareholders vote in favor of the acquisition by Mawson Gold Limited. This comes after careful consideration by the Independent SXG Board Committee, which excludes Michael Hudson due to his dual role as Executive Chairman and Interim CEO of Mawson.
The Scheme, if approved, will see Mawson acquire all SXG shares not already owned by it, making SXG a wholly-owned subsidiary. The directors believe this will simplify the corporate structure and potentially enhance access to capital markets.
Independent Expert's Report
The Independent Expert, Grant Thornton Australia, has concluded that the Scheme is in the best interests of SXG Non-Associated Shareholders, citing the advantages outweighing the disadvantages. The report supports the board's recommendation, noting potential benefits such as improved market access and reduced shareholder overhang.
Conditions and Next Steps
The Scheme requires approval by a majority of shareholders and the court. Key conditions include regulatory approvals and no superior proposals emerging. The Scheme Meeting is scheduled for 13 December 2024, with the expectation that Mawson will be listed on the ASX under a new name, Southern Cross Gold Consolidated Ltd.
Potential Impacts
If the Scheme proceeds, SXG shareholders will receive Mawson CDIs or, upon election, Mawson Shares, maintaining their economic interest in the assets. The transaction is expected to streamline operations and reduce costs, with the combined entity benefiting from a dual listing on the ASX and TSXV.
The proposed acquisition is anticipated to streamline Southern Cross Gold's operations, potentially enhancing market access and reducing costs. The market reaction will likely hinge on the perceived benefits of the simplified structure and improved capital market access. The Scheme's success could lead to increased investor confidence and a positive revaluation of the company's assets.
Investor Reaction:
Analysts are expected to view the Scheme favorably, given the potential for enhanced market access and reduced administrative costs. However, investor sentiment will depend on the final approval and implementation of the Scheme, as well as any emerging superior proposals.
Conclusion:
Southern Cross Gold shareholders are encouraged to consider the potential benefits of the Scheme, including improved market access and operational efficiencies. The board's unanimous recommendation and the Independent Expert's positive assessment provide strong support for the Scheme. Shareholders should attend the Scheme Meeting on 13 December 2024 to cast their votes.