TORONTO (miningweekly.com) – Montreal-based Glen Eagle Resources is “disappointed” that explorer Kinbauri Gold terminated an agreement between the two companies, and is considering its options in response to what it believes is a breach of agreement, the firm said on Friday.

In April, Glen Eagle agreed to pay C$32-million for a 45% stake in Kinbauri's Spanish subsidiary.

But Kinbauri, which owns past-producing mines, as well as other projects and exploration properties, in Spain, said that it did not receive “sufficient comfort” that new funding arrangements necessary to complete the transaction were available to Glen Eagle.

Kinbauri is also the subject of a hostile takeover bid by gold junior Orvana Minerals, while shareholder Jaguar Financial, which opposes the Glen Eagle deal, is trying to have the company's board of directors replaced.

“After carefully considering the information provided by Glen Eagle in the context of the takeover bid by Orvana Minerals and the application by Jaguar Financial, Kinbauri advised Glen Eagle that the agreement between the parties had come to an end,” the firm said in a statement.

Kinbauri said that it has decided to allow the matter to be determined in a court of law at the same time as the application brought by Jaguar, which is scheduled to be heard on June 17.

Meanwhile, a special committee of independent directors continues to evaluate the Orvana bid and to consider other alternatives, and Kinbauri expects to make a recommendation to shareholders next week, the firm said.

Orvana produces gold from the Don Mario mine in Bolivia.

“In the interim, Kinbauri encourages shareholders not to take any action with respect to the offer.”

Glen Eagle, for its part, said separately that it remains “fully committed” to the transaction with Kinbauri.