Placer Dome (PDG-T) has been rebuffed in its attempt to take over Highlands Gold, the Papua New Guinea-based company that owns 25% of the Porgera gold mine.
The major offered US$340 million (or A70 cents per share) for all outstanding shares of Highlands Gold.
But recently the shares have been trading at A75 cents-77 cents, and Highlands Gold has stated it believes “the terms of this unsolicited offer are inadequate and significantly undervalue Highlands Gold’s long-term potential.” The company told its shareholders not to sell their shares in the market.
Nonetheless, Placer Dome, which already owns one-third of Highlands, says it is confident its bid will succeed.
“We acquired 33% prior to the disclosure of the offer,” says Placer spokesman Earl Dunlop, adding that the company will persevere in its plan to acquire the remainder.
Placer Dome already holds an 18.8% stake in Porgera. The combined open-pit/underground operation has produced more than 6 million oz. gold in its 6-year life.
Porgera’s proven and probable reserves are estimated at 78.7 million tonnes grading 4.5 grams gold per tonne, equivalent to about 11.5 million oz. The project also contains measured and indicated resources of 16.4 million tonnes at 2.2 grams gold, based on a cutoff of 1.5 grams.
In 1995, Porgera produced 848,872 oz. gold at a cash cost of US$197 per oz.
and a total cost of US$267 per oz.
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