Investors support Eldorado Gold bid for copper-focused Foran

Eldorado Gold Corp.’s C$3.8 billion ($2.7 billion) bid to buy Foran Mining Corp. won shareholder support, advancing plans to create a larger gold-and-copper miner after overcoming an activist campaign that cast doubt on the deal’s prospects.

Almost 85% of Eldorado shareholders who voted at a meeting on Tuesday supported the acquisition, exceeding the 50% threshold required for the transaction to proceed. Foran investors backed the takeover at a separate meeting earlier in the day.

Eldorado, which owns gold projects in Canada and Europe, launched a cash-and-stock offer in February to acquire all of Foran’s shares. The purchase — unanimously backed by both boards — increases Eldorado’s exposure to copper through Foran’s McIlvenna Bay project in east-central Saskatchewan, which is slated to begin production in mid-2026.

“This is going to be a long life, high margin mine, and at the end of the day those are very rare,” said Chris Mancini, co-portfolio manager of the Gabelli Gold Fund, who owns Eldorado. “Eldorado will still be a gold mining company, but this will give them another cornerstone asset.”

The combined entity will likely be weighted about 77% to gold, 15% to copper and 8% to other metals, the companies said in February. Miners have raced to secure copper as demand rises amid the electrification of the global economy, with deposits becoming harder to find and more costly to develop.

Shares of the companies — both based in Vancouver — fell after releasing their respective results. US-listed shares of Eldorado Gold dropped 2.1% as of 4 pm in New York. Foran Mining declined 2% in Toronto trading.

Conflicting guidance from proxy advisers ahead of the vote had clouded the outcome. Last month, Glass Lewis & Co. recommended Eldorado shareholders oppose the transaction, citing concerns the company overvalued the target. By contrast, Institutional Shareholder Services urged investors in both Eldorado and Foran to support the takeover.

Mixed signals from Eldorado investors also raised questions about support for the acquisition, including vocal disapproval from L1 Capital, the company’s third-largest shareholder. The Melbourne-based hedge fund wrote to Eldorado’s board last month requesting the miner terminate the takeover proposal. L1 co-chief investment officer Raphael Lamm called it “one of the most value-destructive deals we have seen in decades of investing in the mid-cap mining sector.”

Two major pension funds, the California State Teachers’ Retirement System and the California Public Employees’ Retirement System, disclosed different voting intentions ahead of Tuesday’s meeting, with the former backing the transaction and the latter opposing it.

Increased scrutiny of valuation and strategy also comes at a time of extreme volatility in metals and broader markets. Copper and gold both surged to all-time highs in January in some of the sharpest rallies on record, though prices have since dropped more than 10% amid the conflict in the Middle East that began in late February.

The Eldorado-Foran deal still needs final court approval. A hearing at the Supreme Court of British Columbia is scheduled for Thursday.

(By Sybilla Gross)