An offer to acquire all minority shares of Audrey Resources (TSE) has been filed by Cambior (TSE), which currently owns 75% of Audrey’s outstanding shares.
Under the terms of the offer, 10.5 shares of Audrey can be exchanged for one share of Cambior, or single shares can be exchanged for $1.40. Cambior has made it a condition of the offer that at least 90% of the minority shares must be tendered by a deadline of 11 p.m. Montreal time on Sept. 25.
A valuation study, dated Aug. 30, concluded that common shares of Audrey had a fair market value of $1.15 to $1.32. Shares of Audrey closed at $1.45 on Sept. 1, the date of the offer. Cambior shares closed at $14.38, at which rate the offer to exchange shares has a cash value of $1.37.
Cambior also released an estimate of the degree to which its earnings will be affected by the recent spill at its 65%-owned Omai gold mine in Guyana. Cambior says it will forego US$2.5 million per month in cash flow and incur monthly costs of US$1-2 million while Omai is shut down. The incident will also bring additional capital costs of US$5 million, not including funds that had already been budgeted for the planned mill expansion and new tailings pond before the spill. Cambior says it remains confident that Omai will be back in production in about three months.
On Aug. 29, nine days after the spill and five days after the leaks from the tailings dam were stopped, the Guyanese Ministry of Health formally lifted its warning against drinking water from the Essequibo River. At the same time, it confirmed there had been no fish kills in the river and no cases of cyanide poisoning among local residents.
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