Atlantic Canada-focused emerging miner Anaconda Mining on Tuesday rescinded its previously announced proposal to increase its offer price for explorer Maritime Resources, after the TSX-V-listed takeover target pushed through with a private placement financing.
Anaconda last week announced that it would increase its offer by about 28% from 0.39 a common share to 0.50 a common share for each Maritime share, provided that the company did not conclude its private placement.
Maritime on Friday closed the private placement, which raised C$1.4-million through the issuance of 7.8-million units at C$0.1 a unit and 5.17-million flow through units at C$0.12 a unit. The proceeds of the financing will go towards advancing the Hammerdown mine project and the Whisker Valley project, in Newfoundland, as well as for general capital and corporate purposes.
Anaconda pointed out on Tuesday that the private placement had diluted Maritime’s shareholders by 23%.
"It is unfortunate that Maritime's management continues to entrench themselves while leading shareholders down a path of chronic ownership dilution. As a result, Maritime management and the board of directors have denied Maritime shareholders the opportunity to tender into Anaconda's proposal to increase its bid. Now, unless Maritime shareholders tender to the offer, they will be subject to further dilution in four months, as outlined by Maritime's circular,” Anaconda president and CEO Dustin Angelo said in a statement.
“By combining our companies, we will create an emerging Atlantic Canada gold mining company with a significant growth profile and the potential to generate more value together as opposed to a standalone Maritime,” he added.
Maritime holds the 51.7 km2 Green Bay property, which hosts the past producing Hammerdown gold mine and the nearby Orion gold deposit, as well as the Lochinvar base-precious metals deposit.
The Green Bay gold property, near Springdale, Newfoundland, contains more than 400 000 oz of gold in the measured and indicated category and more than 600 000 oz in the inferred category, both at a 3 g/t cutoff grade.
Shares in TSX-V-listed Maritime dropped 20% on Friday, from 12.5c a share to 10c a share. On Monday, the stock edged back to 10.5c a share.
Anaconda’s stock fetched 36c a share on the TSX on Monday.