Placer Dome, Canada's second biggest gold miner, has increased its offer for Australia's AurionGold by thirteen percent to A$1.5 billion ($820 million) as it tries to boost production by a third to catch up to rivals.
The Vancouver based Placer has said that it will add 35 Australian cents a share to its offer of 17.5 Placer shares for every 100 AurionGold shares, valuing AurionGold at A$2.97 a share. AurionGold traded at A$2.78 before the higher bid was announced.
AurionGold investors had said that Placer may have to add cash if it is to succeed in buying Australia's biggest independent gold producer and compete with North American rivals. Newmont Mining Corp. and Barrick Gold Corp. have made acquisitions in the past year to boost sales as gold prices rose fourteen percent.
“It's encouraging that they've raised it a bit, but we're evaluating the Placer Dome assets, which is the important thing,” said David Whitten, head of global resources at Colonial First State Investments. Colonial is a unit of Commonwealth Bank of Australia, which owned 16.27 percent of AurionGold, according to a stock exchange filing dated February 25th.