Eldorado Gold to buy rest of Greece-focused Glory Resources

31st October 2013 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – Gold explorer Glory Resources has signed a bid implementation agreement with Eldorado Gold, which already owns a 19.9% stake in the Australian junior.

The TSX-listed company is offering shareholders of Glory, which owns a gold project 15 km from Eldorado's Perama Hill project in Greece, 17c in cash for each fully paid ordinary share held, valuing Glory at around A$38-million.

The ASX-listed explorer said on Thursday that the offer reflected a 42% premium to the closing price of the company’s shares on October 30.

Eldorado would also acquire all the issues options of Glory for A$1.8-million in cash, and would settle the company’s deferred obligations in the Sapes gold project to Cape Lambert, for A$6.5-million.

Glory’s main asset is the Sapes project, in Greece, which has a Joint Ore Reserves Committee-compliant reserve of 637 000 oz, at an average grade of 15.1 g/t gold. The project is near Eldorado’s Perama Hill project, on Thrace.

“The acquisition of the Sapes project reaffirms our belief in the geological potential of Thrace, which when realised, will bring significant benefits to the region as these deposits are developed in a socially and environmentally responsible manner,” said Eldorado CEO Paul Wright.

Glory’s Sapes project was originally acquired from Cape Lambert in 2009 as part of its A$135-million bid for the CopperCo assets. In August 2011, Cape Lambert became a cornerstone investor in Glory by selling the Sapes project to Glory for A$32.5-million in cash, and 16-million Glory shares.

Cape Lambert currently holds some 36.75-million shares in Glory, which was a 16% shareholding in the total issued capital.

ASX-listed Cape Lambert has announced its intent to accept the takeover offer, and to accept the A$6.5-million upfront payment from Eldorado in lieu of a proposed A$10-million payment from Glory, when certain key milestones were achieved at Sapes.

The Glory board said that the takeover offer would provide a number of benefits, including a substantial premium to the company’s current share price, immediate liquidity of stock, a certainty of value in cash in the current economic conditions, and the elimination of the risks associated with the continued permitting uncertainty at the Sapes project.

The board has recommended that shareholders accept the offer, in the absence of a superior proposal.