Norgold, Shandong battle over Cardinal Resources

A drill crew at work at Cardinal Resources’ Namdini gold deposit in northern Ghana, 40 km south of the Burkina Faso border. Credit: Cardinal Resources.

Russian miner Nordgold (LSE: NORD) is offering to buy all shares in Ghana-focused Cardinal Resources (ASX: CDV) it does not already own, valuing the Australian-listed company’s equity at A$347 million (US$243 million).

Nordgold, whose non-executive chairman is billionaire Alexey Mordashov, is Cardinal’s largest shareholder with a voting power of almost 19%.

The Moscow-based company had attempted to buy the Australian gold producer for about A46¢ per share in March.

Its new bid of A66¢ per Cardinal share represents an 11.9% premium to its last close, as well as a 10% premium on a US$221 million-offer put forward by China’s Shandong Gold Mining in June.

Cardinal had recommended shareholders accept Shandong’s proposal, noting it represented a 31.1% premium to Nordgold’s preliminary bid.

Shandong’s offer was subject to a 50.1% minimum acceptance condition, as well as Australian and Chinese regulatory approvals.

Cardinal said today that it would consider Nordgold’s new offer, but noted it had obligations under the bid implementation agreement inked with Shandong Gold last month.

It also pointed out that the Nordgold bid had been unsolicited, urging its shareholders not to take any action until a recommendation can be made.

Cardinal holds an interest in a number of tenements within Ghana, and is focused on the development of its Namdini project, which has  5.1 million oz. gold in reserves.

Nordgold, which acquired many of its major assets during the 2008-2009 financial crisis, owns several gold mines in Africa, including Bissa in Burkina Faso and Lefa in Guinea. It also operates in Russia and Kazakhstan.

— This article first appeared in The Northern Miner and are part of Glacier Resource Innovation Group.


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