Gold Fields was confident the valuation would support the price it was offering
Gold Fields? offer of C$3 a share is pitched at a 19% premium to Bolivar Gold?s trading price on the preceding Friday and a 41% premium to the preceding 30-day trading average, Resource Investor reported.
Bolivar operates the Chico 10 gold mine in Venezuela, which is expected to produce 190,000oz of gold next year.
Scion Capital, which advises two funds controlling 14.46% of Bolivar Gold, wrote to the company to complain that the offer did not represent fair value. It said the premium to recent trading prices was not a fair reflection of Bolivar?s value. They urged an independent valuation be conducted.
Gold Fields said it would apply for an exemption from the requirement for an independent valuation.
Since Scion Capital had raised the issue, Gold Fields had engaged independent valuators and the exercise was under way, Gold Fields spokesman Willie Jacobsz said yesterday. Gold Fields was confident the valuation would support the price it was offering.
Ironically, Gold Fields came in for some criticism in South Africa for buying into Venezuela because of the risk around gold mines, so if it had offered much more for Bolivar it could have been accused of overpaying.