Sydney-based gold explorer Andean Resources, under bid from two Canadian companies with multi-billion dollar offers on the table, says it did not breach the listing rules by failing to inform the ASX of a takeover proposal from Eldorado Gold Corporation.
Andean said in a statement to the Exchange yesterday it did not inform the ASX of a proposal received from Eldorado after market close on August 30, because it was holding negotiations with another company, Goldcorp Inc, and both proposals were confidential and incomplete.
Eldorado announced its proposal to the market a few days later, at 10.35 am on Friday September 3.
In a letter to Andean, the ASX asked why Andean did not request a trading halt or release the Eldorado information to the market earlier.
The share price of Andean had jumped from $3.84 on August 12, to an intraday high of $6.40 on September 3, the ASX said in the letter.
"The company always takes into account the speculative nature of its stock and the fact that it receives unsolicited proposals regularly," Andean said in a letter to the ASX yesterday.
"The company continues to believe that the announcement of non-material information, including an incomplete and preliminary proposal that it does not intend to pursue or that it has rejected, would likely result in false market securities."
The shares closed at $7.04 yesterday, up 4c as investors punt on another bidder (some say Barrick or Newmont) to emerge to overbid the offers from Goldcorp and Eldorado.
The Salt Lake City-based Andean (it’s listed on the Australian and Toronto sharemarkets) has recommended a $C3.6 billion ($A3.8 billion) cash and scrip offer from the world’s number two gold miner, Goldcorp.
That offer bettered the $C3.44 billion share bid from Eldorado.
Still in mining and Western Areas surprised yesterday by saying it is seeking opportunities in China to expand its operations.
The news emerged in a production update from the company yesterday.
It helped push the shares up 3%, or 16c, to $5.50 on a day when the market ended slightly lower.
They had been up 25c, or over 4.6% at one stage during the day.
The company is focused on the Forrestania region of Western Australia but managing director Julian Hanna said in a statement on Tuesday that Western Areas was eyeing China for expansion.
"Western Areas is exploring new opportunities in China and introducing the company to new investors in the region," he said.
"With the commencement of exports through Esperance (in WA), it is logical we should look to expand our activities in China."
The company began exporting product to China’s largest nickel producer, Jinchuan Group, in late July under a two-year sales contact for a total of 25,000 tonnes of nickel in concentrate.
Western Areas had until then only sold nickel to BHP Billiton Ltd’s Kambalda smelter in WA and presently sells the mining giant 10,000 tonnes of nickel in concentrate each year.
Western Areas said China was hungry for nickel, with current available nickel supply falling about 100,000 tonnes per annum short of demand, which was growing.
"China is becoming the dominant global importer of nickel to supply expanding stainless steel, plating and battery industries.
"Available nickel supply to China is approximately 350,000 tonnes pa compared with growing demand up to 450,000 tonnes.
"At the same time, China is planning to reduce domestic nickel pig iron production because of energy restrictions," it said.
Western Areas also said it had mined a total of 6,278 tonnes of nickel in ore in the first two months of the current financial year.
"This exceeds budget for this period by 60 per cent and provides further confidence that the FY 2010/11 target of 25,000 tonnes of nickel mined per annum from Flying Fox and Spotted Quoll (mines) will be reached," it said.
And gold miner St Barbara Ltd is proposing to consolidate its share base, in a bid to make it more attractive to international institutional investors and not just small punters and day traders.
St Barbara has more than 1.95 billion shares on issue, and said yesterday it will seek to consolidate this down to about 326 million by converting six shares into one new share.
Shares in the company closed at 38c on Monday, and the company said the price was limiting potential investors.
Yesterday they lost 5%, or 3c, to 36c.
"Some potential international institutional investors are precluded by their charters or mandates from investing in stocks with share prices less than $US1," the company told its shareholders.
"The directors believe that the proposed consolidation of the company’s shares … will create a more efficient capital structure and share price for a listed entity of St Barbara’s size
