R/€ = 16.15 Change: 0.05
R/$ = 14.43 Change: 0.06
Au 1282.71 $/oz Change: 8.02
Pt 808.29 $/oz Change: 7.39
 
 
R/€ = 16.15 Change: 0.05
R/$ = 14.43 Change: 0.06
Au 1282.71 $/oz Change: 8.02
Pt 808.29 $/oz Change: 7.39
 
 
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Cornerstone tells SolGold that its proposed offer will not succeed

11th February 2019 BY: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online

TSX-V-listed Cornerstone has told its potential suitor that it will not be successful in a takeover of the company, after LSE- and TSX-listed explorer SolGold on Friday announced for the second time its intention to make an offer for Cornerstone.

SolGold said on Friday that it believed all Cornerstone’s shareholders should be given the opportunity to make an informed decision, and that an independent review should be conducted by the company’s board.

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This is after Cornerstone previously dismissed a takeover approach in less than three hours, leading SolGold to question whether shareholders representing more than 50% of the outstanding shares have had time to be contacted, and whether a board meeting had been convened before the intended offer was rejected.

In response, Cornerstone confirmed that shareholders that collectively own more than 50% of the outstanding shares had notified the company that it would not support the terms announced by SolGold.

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“If SolGold proceeds to make a formal offer on these terms, the company believes that SolGold’s offer would be incapable of being successfully completed,” Cornerstone said. It also added that its directors had assessed the proposal and that it continued to believe that it was undervalued.

SolGold has maintained that its offer of $0.55 a share is a 20% premium to Cornerstone’s target share price.

SolGold previously said that it had approached Cornerstone in 2017 and in 2018, but that the Canadian company had indicated that it would only engage in negotiations if 50% of the seats on the board of directors of the combined entity were allocated to Cornerstone and if CEO Nick Mather and chairperson Brian Moller were replaced.

Cornerstone owns 15% of SolGold’s Ecuadorian company that owns the Cascabel concession. The takeover target points out that, effectively, it owns a direct and indirect interest of 23% in the Cascabel concession and that the takeover would result in Cornerstone shareholders owning about 18% of SolGold, effectively a 22% reduction in their interest in Cascabel.

“Cornerstone, as the operator of the Cascabel project up until the major discovery was made with drill hole #5, is disappointed that SolGold has not put out the preliminary economic assessment that initially was supposed to be released in January 2019, that would highlight the significance of the discovery made by the Cornerstone team and assist Cornerstone shareholders in properly assessing the value of the Cascabel concession,” commented president and CEO Brooke Macdonald.

SolGold’s Cascabel project is one of the few stand-out copper development projects and has piqued the interest of global majors, including Newcrest and BHP, which own respective holdings of 15.33% and 11.1% in the company. 

EDITED BY: Creamer Media Reporter
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