Inter-Citic rejects hostile takeover approach from Chinese company
Inter-Citic Minerals (TSE:ICI) Thursday rejected an unsolicited takeover offer from a large Chinese mining company, citing the bid as too low.
Toronto-based Inter-Citic, which holds the Dachang gold project in China, didn't disclose the identity of the company but said the firm's offer included an indicative price of $1.20 to $1.70 per share.
In Thursday morning trading, the company's stock was up 14% at 97 cents.
Inter-Citic's chairman, Mark Frederick, said: "The Dachang gold project is a great exploration success story that, in spite of currently challenging global markets and very recent and unusual trading volumes, will continue to be recognized as a gold asset of very significant value in a market where the demand for gold and quality gold projects has been increasing substantially.
"With $22 million in the bank, the company is well funded to further advance and expand one of China's largest undeveloped gold resources."
A special committee of Inter-Citic's board rejected the offer, saying the indicative price "significantly undervalued the company and its prospects and was not in the best interests of shareholders".
The company said that it was in a strong position both financially and operationally.
Inter-Citic Minerals is in its seventh year of exploration at its key Dachang gold project. The 279 square kilometre property is located in the Qinghai Province of Western China.
The currently defined NI 43-101 compliant resource at Dachang, calculated June 28, 2011, consists of an estimated measured and indicated inventory of 1.88 million ounces of contained gold (17.2 million tonnes grading 3.41 grams per tonne gold) plus a further Inferred mineral resource of 1.93 million ounces of contained gold (21.3 million tonnes grading 2.83 grams per tonne gold).
In August, the company started a 25,000 metre drill and 10,000 metre trenching program at Dachang.
