Kinross Gold‘s (K-T, KGC-N) $870 million bid is enough for Aurelian Resources (ARU-T) shareholders, clearing the way for the Toronto-based miner to take charge of the Fruta del Norte gold deposit in Ecuador.
Aurelian shareholders have tendered 75% of their shares to the bid giving Kinross the necessary approval.
While some Aurelian shareholders cried foul claiming the company was selling out at too low a price the country risk attached to doing business in Ecuador acted as a buffer against rival offers.
Fruta Del Norte is a world class deposit with an inferred resource of 13.7 million ounces of gold and 22 million ounces of silver, but with the contents of a new mining law in Ecuador still unknown, and all mining operations suspended until it is finished, many investors have grown wary of the nation.
That allowed Kinross to make a bargain pitch for the deposit. When the offer was made back at the end of July, the 0.317 Kinross share and 0.1429 warrant offer for each Aurelian share represented a 63% premium on the companies 20 day trading averages and the total offer was worth $1.2 billion.
But since then, Kinross shares have fallen from the low $20 range into the mid-teens, and at current levels the premium is only about 10%.
In Toronto on Sept. 4, Kinross shares were off roughly 5% or 85 to $14.72 on 4.9 million shares traded. Aurelian shares were off almost 4% or 20 to $5.13 on just over 1 million shares traded.
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