ASHTON BOARD REJECTS STORNOWAY OFFER
The board of Vancouver-based ASHTON MINING OF CANADA (www.Ashton.ca) has recommended its shareholders reject the unsolicited offer from STORNOWAY DIAMOND CORP., also of Vancouver. Stornoway has offered $1.25 cash per share or one Stornoway share plus $0.01 for each Aston share. Ashton calls the offer “inadequate”.
Ashton has also filed an application with Canadian securities regulators seeking orders to cease-trade the Stornoway offer and lock-up agreement due to serious concerns about the manner in which the lock-up agreement confers a potential $2.0 million benefit to Rio Tinto that is not available to Ashton’s minority shareholders.
Besides its bid for Ashton, Stornoway (www.StornowayDiamonds.com) has also made an offer to buy up all outstanding shares of CONTACT DIAMOND CORP. of Toronto. Stornoway has offered 0.36 of one of its shares in exchange for each Contact share.
BARRICK, NOVAGOLD, PIONEER LOCKED IN BATTLE
The disagreement among Toronto’s BARRICK GOLD and Vancouverites NOVAGOLD RESOURCES and PIONEER METALS continues to simmer. It started in June 2006 when NovaGold (www.NovaGold.net) launched a hostile takeover bid for Pioneer. Pioneer sought help from Barrick (www.Barrick.com), which made a friendly counter-offer for Pioneer (www.PioneerMetals.net) and a hostile bid for NovaGold as well.
Complicating matters, Barrick (30%) and NovaGold (70%) are partners in the Donlin Creek gold development in southwest Alaska. NovaGold has rejected Barrick’s takeover offer and filed a lawsuit accusing Barrick of misusing NovaGold’s confidential information when Barrick made is bid for Pioneer. Barrick denies the accusation.
EUROZINC, LUNDIN MINING TO MERGE
EUROZINC MINING CORP. and LUNDIN MINING CORP., both with offices in Vancouver, have announced their intention to engage in a friendly merger. The new, diversified copper-zinc producer would be held 56.7% by EuroZinc investors and 43.3% by Lundin stockholders.
As of June 30, 2006, the two companies had combined assets of US$2.4 billion. Lundin (www.LundinMining.com) assets include the Zinkgruvan zinc-lead-silver mine and Storliden copper-zinc mine in Sweden as well as the Galmoy zinc-lead mine in Ireland. EuroZinc (www.EuroZinc.com) operates the Neves-Corvo copper-zinc mine in Portugal. It is also preparing to reopen the nearby Aljustrel zinc-copper mine in 2007. When all five mines are in production, the new company will have an annual output of approximately 450 million lb of zinc, 200 million lb of copper, 175 million lb of lead and 6 million oz of silver.
Both companies will be equally represented on the new board of directors under the chairmanship of Lukas Lundin. Colin Benner from EuroZinc will be vice-chairman and CEO, based in Vancouver. Karl-Axel Waplan from Lundin will be president and COO, based in Stockholm.
PELANGIO TO JOIN HUNTER DICKINSON GROUP
Toronto-based PELANGIO MINES has agreed to join the HUNTER DICKINSON GROUP of Vancouver. Pelangio will transfer its assets including the former Detour Lake gold mine and Block A project to a new company, DETOUR GOLD CORPORATION. The deal is worth approximately $65 million in Detour Gold shares (20 million shares issued at $3.00) plus $5 million in cash. Pelangio will then own 50% of Detour Gold.
Pelangio (www.Pelangio.com) anticipates that the deal will close in January 2007. It is subject to approval by regulators and Pelangio shareholders. Detour Gold must also complete a minimum $10-million private placement within the next 45 days and a minimum $15-million initial public offering no later than Jan. 22, 2007. When it is successfully launched, Detour Gold probably will be reachable from www.HDGold.com as are the other Hunter Dickinson companies.