Aphrodite flags $19m impairment amid merger

Takeover target Aphrodite Gold has flagged an impairment charge of up to $19 million against its self-titled gold project near Kalgoorlie, but says it will not affect the value of its all-scrip merger with Perth-based Spitfire Materials.

Aphrodite said in a statement it had received a technical valuation for its exploration and evaluation assets, including the Aphrodite gold project, which will form part of an independent expert’s report on the proposed $32 million tie-up with Spitfire.

It valued Aphrodite’s assets at between $8.8 million and $17 million, with a preferred value of $12.5 million.

“In light of the above information, the company has commenced an impairment review in relation to the carrying value of the company’s exploration and evaluation assets in the company’s accounts as at June 30 of $27.7 million,” Aphrodite said.

“The company expects that those assets will be written down by an amount of between $10.8 million and $19 million in the company’s accounts.”

Aphrodite said the impairment was non-cash, and wouldn’t affect the amount of the consideration its shareholders would receive under the proposed Spitfire merger.

Under the agreement, which was announced in August, Spitfire would pay one share for every 2.9 Aphrodite shares to acquire all shares it doesn’t already own in the target.

Spitfire shares were unchanged at 12.5 cents each, while Aphrodite shares fell 5.4 per cent to 3.5 cents each, at 10:20am.