A long-running battle between Nordgold (LSE: NORD) and China’s Shandong Gold Mining over Cardinal Resources (ASX: CDV) took a fresh turn, after the Russian gold miner matched Shandong’ s latest bid of A$1 per share.
Both suitors have been locked in a back-and-forth contest for the Australian miner — which owns the 5.1 million-oz. Namdini gold project in Ghana — since Nordgold put forward a A45.7¢ per share bid in March.
The Moscow-based company became at the time Cardinal’s largest shareholder, with a 19.9% voting power. It sits now at just over 28%. Shandong holds about 11.9%.
Seven months of competing offers went by until Shandong came up in September with what it seemed a winning offer. The A$1-per-share bid valued the company at A$538 million (about US$381 million).
Nordgold, whose non-executive chairman is steel billionaire Alexey Mordashov, refuses to give up the fight for the Perth-based miner. It said today it would increase its last offer of A90¢ a share to match the bid from Shandong.
The move came less than 24 hours after Cardinal updated investors on the competing proposals, warning that the lack of any price increase or other update from Nordgold would result in unwarranted delays to progress at Namdini.
Cardinal also said Shandong had informed the company on Oct. 19 that A$1 per share was its best and final price in the absence of a higher competing bid.
Nordgold CEO Nikolai Zelenski said the new offer was its third price increase. He said it demonstrated the company’s commitment to finalizing a deal and progressing Namdini.
“We have the project development expertise and robust balance sheet necessary, as well as the proven environmental and community-led approach to mine development to underwrite the successful construction and commissioning of the Namdini project,” it said in a statement.
A feasibility study on the project estimated that it will produce about 4.2 million oz. gold over a mine life of 15 years. Nearly 1.1 million oz. will be generated in the first three years of operation.
Initial capital costs for Namindi were forecast to range from US$275 million to US$426 million, depending on the project’s scale.
Cardinal’s board said it was considering Nordgold’s latest offer and urged investors to take no action.
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.
Its offer for Cardinal is open until Nov. 3.