PERTH (miningweekly.com) – Mining giant BHP Billiton has offered to pay $30-million for a 10% interest in Aim-listed SolGold, but the Brisbane-based explorer has rejected the proposal and decided to stick with a $33-million financing deal with Maxit Capital and Newcrest Mining.

In addition to a 10% shareholding in SolGold, BHP had also hoped to secure an earn-in into the Cascabel copper/gold project, in Ecuador, by spending $275-million to acquire a 70% stake of SolGold’s 85% interest in the Cascabel holding company Exploraciones Novomining SA.

SolGold said in a statement on Monday that BHP’s offer had been subject to a number of conditions, including SolGold withdrawing from the previously announced financing arrangement with Maxit and Newcrest. The financing agreement, signed in September, will allow Maxit and its clients to subscribe for more than 63-million shares in SolGold, to gain a 4.43% shareholding, while Newcrest will subscribe for more than 142-million shares for a 10% shareholding.

SolGold said that after careful examination, and input from legal advisers, it had determined that BHP’s offer was not in the best interest of its shareholders, and was not a superior proposal to the $33-million financing deal.

Besides from being highly conditional and nonbinding, SolGold said there was no certainty that the BHP proposal would be consummated on the terms proposed, given the number of key documents that would need to be completed, including an earn-in agreement, private placement and shareholder agreements.

More importantly, the board felt that the implied price of BHP’s proposal was a significant discount to SolGold’s current trading price, and the $33-million financing deal with Maxit and Newcrest.

“We are very pleased to see BHP join a growing list of international mining companies that are interested in investing in SolGold; however, the current $33-million financing with Maxit and Newcrest is the preferred option at this time, as it leaves us in control of this very exciting project at Cascabel,” said SolGold executive director Nick Mather.

“There is considerable upside in the additional 13 targets, as well as the existing and growing Alpala deposit. We have developed the exploration models and strategies to an advanced level, are well funded and we are intent on delivering and retaining that upside substantially.”

SolGold traded 15% higher at 19.25p a share on Monday, giving the company a market capitalisation of nearly £238-million.