PERTH (miningweekly.com) – The board of gold miner Kingsgate Consolidated has urged its shareholders not to take any action on the takeover offer from Singaporean company Northern Gulf Petroleum.
Northern Gulf earlier this month offered to acquire a 50.1% stake in Kingsgate for 4.2c a share in cash, with the company’s director Chatchai Yenbamroong claiming that he could potentially save Kingsgate from losing its Chatree gold mine, in Thailand.
The Chatree mine is expected to cease operations by the end of December, by order of the Thai government. While not giving any reason for the forced closure, the government has said that the decision to suspend operations at the mine is in no way a reflection on the way that Kingsgate operates the mine.
Kingsgate chairperson Ross Smyth-Kirk said in a letter to shareholders that while the board’s review of the Northern Gulf offer was not yet complete, the board felt that the offer was opportunistic, as it was made while Kingsgate shares were in voluntary suspension, and was only a proportional offer, which meant that Northern Gulf would secure control of the company at minimal cost.
Smyth-Kirk said that based on the bidder's statement, Northern Gulf had neither the experience nor the credentials needed to realise the potential of Kingsgate’s flagship asset, the Nueva Esperanza project in Chile.
Kingsgate is expected to make a formal response to the takeover offer by mid-October.