TORONTO (miningweekly.com) – Shares in uranium explorer Forsys Metals leapt 29,3% on Monday, after the company announced that it had agreed to a buyout offer from a company controlled by veteran Democratic Republic of Congo miner George Forrest.
George Forrest International Afrique (GFI), a subsidiary of the Forrest Group, has agreed to pay C$7,00 a share for Forsys, which was a 55% premium to the average closing price of the company's shares on the TSX in the 20 trading days ended November 13.
Forsys shares rose C$1,36 on Monday to C$6,00 a share in Toronto.
The company's board has unanimously approved the offer, after financial advisors at CIBC World Markets gave the opinion that the proposed transaction was fair to Forsys shareholders.
The firm's directors and seniors offers have also locked in shares, options and warrants representing about 20,4% of Forsys' outstanding shares on a fully diluted basis.
“We believe that this offer provides all shareholders of Forsys with the opportunity to realise an immediate and significant premium for their shares in cash,” said president and CEO Duane Parnham.
The offer is expected to close in February 2009, and GFI plans to fund the acquisition through a combination of cash on hand and existing credit facilities.
Forsys' main asset is its Valencia uranium mine, in Namibia, where it has said it plans to start production in 2010.
"Namibia, in my view, is a country with a very positive future for economic growth with an established mining industry including world class uranium mines,” Forrest said in a statement on Monday.
The Valencia project is located 35 km along the geological strike to Rio Tinto's Rossing mine and 40 km north of Paladin Resources' Langer Heinrich operation.
The mine will produce approximately 3-million pounds of uranium a year, and Forsys was granted a 25-year mining licence for the operation in August this year.
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