Article Found this article, a revap of the latest drama
Can Samaranta Mining Corporation (TSX.V: SAX) Brush Off Unsolicited Offer?
Posted on February 21, 2013
There has been plenty of activity surrounding Samaranta Mining Corporation (TSX.V: SAX) since the beginning of the week following Tuesday’s announcement from Samarium Group Holding Ltd., a privately held investment company, in which they stated they would commence a tender offer to purchase not less than 51% of the issued and outstanding shares of the mineral exploration and development company at a price of CAD$ 0.1200.
SAX issued their own press release acknowledging they were aware that Samarium Group Holding intended to make an unsolicited offer but also made clear that the offer “does not constitute a formal takeover bid yet.”
Tuesday’s news led to a trading halt of SAX shares while the company prepared a response and when trading resumed on Wednesday shares of the company climbed to a six-month high of 0.0650 before closing at 0.0450 on volume that topped the 9.9 million mark.
With the share price of SAX well below the offer price it would appear that investors are of the opinion that Samarium’s offer will be rejected. Making things more interesting, SAX pointed out in their February 19, 2013 press release that “Volkmar Hable, Executive Vice-President of Mining and Exploration of Samaranta, and a former director of Samaranta Mining Corporation (the Board of Directors received his resignation on February 12, 2013), is noted as a director of Samarium.”
According to SAX, “despite this relationship, the company had no prior knowledge of the Samarium Offer and has not had any communications with Mr. Hable with respect to the Samarium Offer, except for a letter of intent forwarded yesterday that merely re-iterates the contents of Samarium’s news release.”
Included in the proposed transaction crafted by Samarium is, upon closing, “a loan of 5.6 million USD at an interest rate of LIBOR plus 8.50% dedicated to the completion of a NI-43101 compliant resource report on the Guadalupe project of the Company, subject to the terms and conditions of this Letter of Intent, plus another 500,000 USD dedicated to an evaluation of the Company’s other projects. The Purchaser intends that the proceeds from the sale of warrants be used by the Company to conduct necessary feasibility studies for putting the Guadalupe project into production.” Samarium has said they intend to complete the closing on or before May 15, 2013.
The Guadalupe gold property is the primary focus of SAX, a property that is contiguous with Frontino Gold Mine, currently the largest gold mine in Colombia and has been in operation for over 150 years with historic production estimated at 7 million ounces.
Looking back at Samarium’s press release Hable noted, “By providing a much needed cash infusion to Samaranta Mining Corporation we will be help the Company to complete its exploration program, and thus add significant value to Samarium Group Holding Ltd. and Samaranta Mining Corporation.”
Obviously an infusion of cash would be of great assistance to SAX as it will be needed for their 2013 drill program outlined by the company back in December. That drill program “will begin with follow-up work and drilling focused on Target Area 2 in the middle portion of the property which is deemed first priority. Target Area 2 demonstrates both a strong IP survey correlation and gold outcropping, both great indicators for gold occurrence below surface. The program will aim to drill 5,000-10,000 metres, evaluating the drill core to determine the depth and direction needed. There are three additional target areas, named Target Areas 1, 3 and 4, which also show correlations with the IP survey. By starting in the centre of the property on a strong target area, the geologic team can begin to get a clearer picture of the gold-rich structures and the direction they trend under cover.”
While SAX has stated that they would like to create a revenue model that would limit the need for future financing, something they believe may be possible from the Segovia Gold Mine Tailings, just how long it will take before they achieve that goal on their own is unknown. The question is whether or not SAX can afford to go it alone in their pursuit of gold.
This entry was posted in TSX and tagged gold, gold mine, investors, mineral exploration, samaranta mining, samarium group, sax, tailings by Editor. Bookmark the permalink.
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