TORONTO (miningweekly.com) – US miner Allied Nevada Gold on Tuesday said it had serious concerns about the credibility of a takeover proposal it received on Monday from China Gold Stone Mining Development.

Reno, Nevada-based Allied Nevada responded to an announcement from China Gold Stone indicating that it had started a tender offer to acquire all of the outstanding shares of the company.

However, for a number of reasons, Allied Nevada said it seriously questioned the credibility of the proposal and advised shareholders to review announcements from China Gold Stone with caution.

Among the company’s concerns was the fact that together with its advisers, Allied Nevada was unable to find any substantive published information on China Gold Stone and could not substantiate the credibility of the proposal.

There is also no public information available to indicate that China Gold Stone has the financial resources to complete the proposed transaction.

Allied Nevada said that contrary to the announcement, no tender offer had been started.

Under US federal securities laws, a tender offer starts when a suitor company files a Schedule 14D-1 with the Securities and Exchange Commission (SEC) and no such filing had been made. The announcement also indicated an expiry date of January 24, which was contrary to US and Canadian securities law.

Further, the proposal was non-binding, and did not provide any certainty or commitment to proceed with a transaction. The proposal was also subject to due diligence and was conditional on executing definitive agreements.

Allied Nevada said it had contacted the SEC and the Ontario Securities Commission with its concerns about the validity and legality of the announcement and alleged proposal.

Allied Nevada’s TSX-listed stock was cease traded on Tuesday morning pending the news, after which the stock gained C$0.66 a share, at C$5.35 apiece, before easing to change hands at C$4.98 early on Tuesday afternoon.