SolGold Shares After Rejecting BHP Billiton Offer
October 10 2016 - 5:30AM
Dow Jones News
By Alex MacDonald
LONDON--Shares in SolGold PLC (SOLG.LN) rose Monday after the
miner rejected an offer from mining giant BHP Billiton Ltd (BHP) to
invest in the company and develop its flagship Cascabel copper-gold
project in Ecuador, preferring a competing investment by
Australia-based Newcrest Mining Ltd. (NCM.AU) and Maxit Capital
LP.
The Brisbane-based U.K.-listed miner with assets in Ecuador, the
Solomon Islands and Australia, said its board has unanimously
rejected BHP Billiton's offer to purchase a 10% stake in SolGold
for $30 million in cash and then spend $275 million on the Cascabel
project in return for 70% of SolGold's 85% stake in the
project.
SolGold's board said the BHP proposal is highly conditional and
implied a significant discount to SolGold's current trading price
and financing with Maxit and Newcrest.
The BHP offer was conditional, among other things, upon SolGold
shareholders voting on Oct. 13 against a $33 million share
placement with Newcrest Mining and Maxit Capital at 16 pence a
share. "We are very pleased to see BHP join a growing list of
international mining companies that are interested in investing in
SolGold; however, the current $33 million financing with Maxit and
Newcrest is the preferred option at this time as it leaves us in
control of this very exciting project at Cascabel," said SolGold
Executive Director Nick Mather.
SolGold is aiming to produce Cascabel's first resource report
this year but work has been delayed by the discovery of high-grade
mineralization in Hole 17 at the Alpala target, the only one of 14
targets to be drilled to date.
The company found 150 meters of ore containing 1.54% copper and
2.05 grams of gold per metric ton of rock at Hole 17.
SolGold shares were up 11% at 18.5 pence a share as of 0832 GMT,
resulting in a market capitalization of GBP226 million ($281
million).
-Write to Alex MacDonald at alex.macdonald@wsj.com
(END) Dow Jones Newswires
October 10, 2016 05:15 ET (09:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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