Guyana Goldfields rejects Gran Colombia offer
2020-05-13 17:58 MT - News Release
An anonymous director reports
GUYANA GOLDFIELDS REJECTS UNSOLICITED GRAN COLOMBIA ACQUISITION PROPOSAL AND REAFFIRMS COMMITMENT TO TRANSACTION WITH SILVERCORP METALS
Guyana Goldfields Inc.'s board of directors, after careful consideration and consultation with its financial and legal advisers, 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 board reaffirms its unanimous support for the transaction previously entered into with Silvercorp Metals Inc. and announced on April 27, 2020.
The board has determined that the Gran Colombia proposal is not in the best interests of the company or its shareholders since, among other things, the Gran Colombia proposal: (i) is complex and highly conditional in nature as it is contingent on the concurrent completion of a separate acquisition by Gran Colombia of Gold X Mining Corp., the terms of which have not been disclosed to the company; (ii) requires the approval of the shareholders of each of Gran Colombia, Gold X and the company, each conditional on the other providing such approval, and (iii) fails to provide the company with adequate short-term liquidity, given the $3.65-million break fee that would be payable to Silvercorp upon the entering into of a transaction agreement with Gran Colombia and the increased ongoing costs to the company associated with a delayed closing date relative to the Silvercorp transaction. The board acknowledges that, based on current trading prices, the Gran Colombia proposal represents a premium to the agreed price under the Silvercorp transaction; however, the board is of the view that such premium does not sufficiently compensate the company's shareholders for the increased risk associated with the Gran Colombia proposal.
Glad they have their heads on straight. SVM has the expertise and capital behind them to make GUY operations a winner. GCM ran by Iafono, who is more of a promoter, than a mining expert.