AngloGold Ashanti Limited said on Tuesday 13th July 2021 that it was interested in buying all the shares that do not already belong to it in Canadian bullion miner Corvus Gold Inc. This announcement was made as the firm plans to broaden its ore reserves.
The company has dropped a big percentage of their South African assets to concentrate on higher returns in the North and South part of America. This is according to undefined sources, who cite the struggling of mining companies in South Africa as a cause for action. Among the issues leading to the struggle are rising costs, volatile labour relations and power disruptions.
The proposed buyout is set to be an all-cash deal and at a premium of 55% to the market price of C$2.58 ($2.06) of Corvus as of May 5. This was just a day before AngloGold, which is already in possession of 19.5% of Corvus, assured the company a $20 million loan, going into a 90-day exclusivity period where it could carry out due diligence of its wealth.
Since May 2021, Corvus’s share price has increased by around 27% to approximately C$3.27. The business arrangement values Corvus at close to $370 million.
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In response to the bid, Corvus said, “Management and the board of directors, in accordance with their fiduciary duties and consistent with their commitment to maximize shareholder value, are reviewing the proposal and have no further comment at this time.”
According to RBC Capital Markets analysts, Corvus Gold owns a considerable land package in the Beatty District in the U.S. state of Nevada with areas adjacent to AngloGold’s Silicon, Transvaal and Rhyolite exploration assets.
AngloGold Ashanti reported that the purchase, which would be the first in ten years, offers an opportunity to build, in the medium and longer term, an affordable, long-life production foundation in a premier mining jurisdiction.