Forrestania Offers 1 Share per 4.3 Zenith Shares Valued at 13.2 Cents Each

Zenith Board Endorses Takeover with Strong Premium

Zenith Minerals Limited (ASX:ZNC) has formally responded to Forrestania Resources Ltd’s (ASX:FRS) off-market takeover bid with a Target’s Statement urging shareholders to accept the offer. The consideration proposed is one Forrestania share for every 4.3 Zenith shares, which, based on Forrestania’s 10-day volume weighted average price (VWAP) of 56.7 cents as of 5 June 2026, implies a Zenith share value of 13.2 cents. This represents a striking 78.6% premium to Zenith’s 30-day VWAP prior to the announcement, a significant uplift that the Zenith Board unanimously recommends shareholders accept, barring a superior proposal.

Managing Director Andrew Smith highlighted the strategic rationale behind the recommendation: Zenith shareholders will gain exposure to a larger, more diversified gold company with near-term production cash flow from Forrestania’s Lake Johnston mine, which is expected to start production in calendar year 2026. This access to operating cash flow aims to underpin further development of Zenith’s flagship Consolidated Dulcie Gold Project, a 675,000-ounce JORC Inferred Mineral Resource situated within granted mining leases in Western Australia’s Southern Cross–Forrestania Greenstone Belt.

Strategic Benefits of the Combined Entity

The offer positions Zenith shareholders as part of a combined group with enhanced liquidity and funding capacity. Zenith has struggled with relatively low trading volumes, averaging just over $100,000 daily over the past year compared to Forrestania’s $1.27 million. The takeover promises to alleviate this liquidity constraint, allowing shareholders to trade their holdings with greater ease in a company valued at approximately $743 million.

Forrestania’s regional consolidation strategy within the Southern Cross–Forrestania gold belt complements Zenith’s assets. The combined portfolio spans multiple development and production-stage projects, including Forrestania’s ongoing conversion of the Lake Johnston facility from nickel to gold processing. This infrastructure proximity could accelerate the Consolidated Dulcie Gold Project’s development pathway, leveraging existing processing capacity and technical expertise.

Zenith’s Consolidated Dulcie Gold Project, recently bolstered by the acquisition of a key mining lease consolidating control over a ~6km mineralised corridor, offers significant upside potential. Recent drilling campaigns have confirmed resource continuity and high-grade intercepts, setting the stage for further resource expansion and development studies. These developments are consistent with Zenith’s strategic review to maximise shareholder value through corporate and asset options.

Conditions, Risks, and Shareholder Choices

The takeover offer is conditional on Forrestania acquiring at least 50.1% of Zenith shares on a fully diluted basis. Should Forrestania reach a 90% stake, it intends to compulsorily acquire remaining shares, potentially leading to Zenith’s delisting from the ASX. The Target’s Statement outlines the risks of accepting or rejecting the offer, including the possibility of share value decline if the offer fails and no superior proposal emerges.

Shareholders face three options: accept the offer in full, sell Zenith shares on the ASX if they have not accepted, or reject the offer and remain shareholders. However, rejecting the offer may result in minority shareholder status if Forrestania gains majority control, limiting influence over Zenith’s strategic direction. The Board cautions that remaining independent carries risks such as the need for substantial capital raisings to develop Zenith’s projects, which may dilute existing holdings.

The offer includes arrangements for Zenith Options and Performance Rights, with cancellation or vesting contingent on effective control. Tax implications vary by individual circumstances, and shareholders are advised to seek professional advice.

Governance and Next Steps

Zenith’s directors, collectively holding approximately 4.51% of shares, have confirmed their intention to accept the offer absent a superior bid. The takeover offer opens on 16 June and is scheduled to close on 17 July 2026, subject to extension or withdrawal. Shareholders will receive detailed instructions with the Bidder’s and Target’s Statements dispatched on 16 June.

Forrestania proposes to replace the Zenith Board with a structure suitable for a wholly owned subsidiary post-acquisition. The combined group’s pro forma financials and governance arrangements are detailed in Forrestania’s Bidder’s Statement.