Guyana Goldfields goes to court to secure final order

…as deal with Zijin Mining concludes

Guyana Goldfields has gone to court in order to secure a final order to close their deal with Chinese company Zijin, citing the interference of an unnamed third party and the need to resolve their claim.

This was communicated in a statement on Monday. According to Goldfields, a hearing on the matter was held on Friday last at the Ontario Superior Court of Justice, where they are seeking a final order to approve the statutory agreement between Goldfields and Zijin Mining.
Goldfields explained that once this agreement is approved, Zijin will be able to acquire the issued and outstanding shares in Guyana Goldfields, for approximately C$1.85 per share. But there is a problem.
The arrangement, Goldfields said, was approved by the court subject to the company placing additional funds in escrow pending the resolution of an unproven claim by a third party. This condition does not affect the terms of the arrangement, and, with Zijin’s consent, the company is in the process of satisfying this condition.
“Completion of the Arrangement is anticipated to occur by the end of August, 2020, subject to the satisfaction or waiver of all conditions precedent to completion. The Company expects that the Shares will be delisted from trading on the Toronto Stock Exchange shortly after the closing date of the Arrangement.”
The Canada-based Guyana Goldfields, which operates local subsidiary Aurora Gold Mine (AGM), had moved to downsize its operations since May, after facing constraints from the COVID-19 pandemic coupled with other financial woes.
It was also linked to the company’s transition into underground mining. Hundreds of local workers were also laid off by Goldfields in the process. The layoffs were announced by Goldfields Chief Executive Officer, Alan Pangbourne, who said a reduction in the workforce would take place at all levels including both national and expatriate employees as the company transitioned its mining operation into a state of care and maintenance for an undetermined period.
At first, Goldfields had entered into an agreement with another Canadian mining company named Silvercorp. They had agreed that Silvercorp would acquire Guyana Goldfields for some C$105 million.
But Goldfields then received a rival offer from Gran Columbia Gold soon after and Silvercorp revised the agreement and increased the offer to C$227 million. The Gran Columbia offer was rejected.
Subsequently, Guyana Goldfields announced that another company had topped that second offer by 35 per cent. Silvercorp was then given five business days to match or improve the C$1.85 cash-per-share new bid. It never did.
The company that bettered the purchasing price and conditions set by Silvercorp Metals Inc turned out to be Zijin Mining Group Co, which specialises in gold, copper, zinc, and other mineral resource exploration and development.
Last month, Goldfields processed its last batch of ore from stockpile and announced that it produced 56,000 ounces of gold for 2020. The site has also gone into a care and maintenance period, ahead of the anticipated takeover by Zijin. (G3)