Source Pravda.Ru

Aurion Gold News

Canada-based gold miner Placer Dome extended its hostile cash and scrip bid for Australia's AurionGold on Tuesday, by 10 days until September 20.

Placer Dome, which has won around 37% of AurionGold shares since launching its bid in May, is offering 17,5 of its shares for every 100 AurionGold shares.

AurionGold shares closed three cents lower, with the announcement of the extension coming after the close of trading.

Placer's original all-scrip offer valued AurionGold, but Placer shares have since slumped, diluting the value of the offer despite the cash injection in late July.

AurionGold's directors have recommended shareholders reject the offer as too low. Placer Dome has now extended the offer six times, as it attempts to patch together the world's fifth largest gold mining house. In rejecting the bid, AurionGold is being backed by major shareholders Colonial First State Bank, with 15% of shares and UK-based M&G Investment Management with about 6%.

However, South Africa's Harmony Gold recently sold its 9,8% interest in AurionGold to Placer Dome.

AurionGold was assembled in December through a marriage of Delta Gold and Gold Fields, two half-million ounce-a-year mining houses better presented to predators as a single larger firm.

Throughout the offer, AurionGold has hinted that a second suitor would launch a competing offer, but to date no rivals to Placer have surfaced despite an industry trend toward consolidation and mergers. Placer also seeks to dig more of its gold outside of politically risky South Africa, which now accounts for 65% of its reserves. Eighty percent of AurionGold's assets are in Australia.

A takeover would give Placer Dome full ownership of the rich Granny Smith gold mine and prospects in the West Australia outback, and lift its half-ownership in Papua New Guinea's Porgera mine to 75%.

With AurionGold, Placer would be mining nearly four-million ounces a year, making it the world's number five producer.

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