Microcap Report: Elgin Mining (V.ELG) active on takeover, Veris (T.VG) plunges

Elgin Mining Inc. (TSX:T.ELG, Stock Forum) rose 62% to 32.5 cents Wednesday after the company said it had entered into an arrangement with Mandalay Resources (TSX:MND, Stock Forum) where Mandalay will purchase all of the outstanding common shares of Elgin for consideration of $0.37 cash or 0.4111 of a Mandalay share per Elgin common share.

Elgin is a Vancouver-based firm engaged in the acquisition, development, evaluation and exploration of gold properties in Sweden and Canada.

According to the news release, the total transaction is valued at approximately $70.0 million and is based on the closing price of Mandalay shares on June 3, 2014 with the implied transaction value of $0.37 per Elgin share representing an 85% premium to Elgin's closing share price of $0.20 on June 3, 2014.

Veris Gold Corp. (TSX: T.VG, Stock Forum) plunged 48% to 14.5 cents after the company said it has received notices of early termination date June 3, 2014, from Deutsche Bank AG, London Branch, with respect to payment defaults under the two forward gold purchase agreements between DB and the company.

Under the forward gold purchase agreement dated August 12, 2011, the effect of the receipt of the notice of early termination date is that the company must make a payment of US$77.3 million by 5:00 p.m. (Pacific Daylight time) on June 9, 2014, failing which payment DB shall take such steps as necessary to enforce its rights against the company.