Canadian-based gold producer, Guyana Goldfields Inc says it’s no longer considering the buy-out offer of fellow Canada-based gold producer, Gran Colombia Gold Corp.
In a release yesterday, Guyana Goldfields announced through its office in Toronto, Canada, “that after careful consideration and consultation with its financial and legal advisors, [the company] has unanimously determined to reject the unsolicited proposal announced by Gran Colombia Gold Corp on May 11, 2020 to acquire all of the issued and outstanding common shares of the Company for consideration consisting entirely of Gran Colombia shares.”
The Company’s board also reaffirmed its “unanimous” support previously entered into with Canadian-based Silvercorp Metals Inc which was announced on April 27.
The Guyana Goldfields board, citing several factors, determined that Gran Columbia’s proposal was not in the best interests of the Company or its shareholders. These factors included the overly complex and highly conditional nature of Gran Columbia’s offer as well as the proposal’s failure to provide the Company with adequate short term liquidity.
In addition, even though the Board acknowledged that, based on current trading prices, the Gran Colombia Proposal represents a premium to the agreed price under the Silvercorp Transaction; it felt that such premium does not sufficiently compensate the Company’s shareholders for the increased risk associated with the Gran Colombia Proposal.
According to Guyana Goldfields, it is committed to completing the transaction entered into with Silvercorp under the terms of the arrangement agreement dated April 26. The Company stated that the Silvercorp transaction will provide significant benefits to its shareholders which include: enhanced trading liquidity, and a significant re-rating opportunity with a geographically diverse mid-tier precious metals company; a strong management team committed to developing the Aurora Underground Project with a track record of operational excellence in underground mining over the last 15 years; elimination of the funding risk associated with the Aurora Underground Project and the option to elect to receive cash in the Silvercorp transaction which provides downside protection.
Full details of the Silvercorp Transaction will be included in a Guyana Goldfields document that is expected to be mailed to shareholders in early June 2020, the release added.
