World’s largest miner gets rejected

Drill rig onsite at Alpala, Ecuador (Photo: SolGold).

The world’s No. 1 mining company BHP Billiton just got a rejection letter from Australian SolGold, regarding its offer to buy a stake in the company to gain exposure to its copper-gold Cascabel project in Ecuador.

On Saturday, BHP presented an investment program that included $30 million for a 10% stake in SolGold and an additional $275 million related to the acquisition of a 70% stake in the unit managing Cascabel.

But the Brisbane-based miner said in a press release the deal was not in the best interest of the company or its shareholders, and that it was not “a superior proposal in comparison to the previously announced US$33 million financing with Maxit and Newcrest.”

“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 US$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.  There is considerable upside in the additional 13 targets as well as the existing and growing Alpala deposit.  We have developed the exploration models and strategies to an advanced level, we are well funded and we are intent on delivering and retaining that upside substantially, for all SolGold shareholders,” the company’s Executive Director Nick Mather wrote in the statement.

SolGold also said that BHP’s proposal was highly conditional, non‐binding and subject to due diligence, and that there was no certainty that it would be consummated on its original terms, given that a number of key documents such as an earn‐in agreement, private placement, and shareholder agreements would need to be completed.

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