Highlands drops threat of takeover lawsuit

Highlands Gold has decided not to pursue Placer Dome (PDG-T) to court following the release by the major of more information on its US$340-million takeover attempt.

“Although not required by law, Placer Dome was happy to release this extra information to shareholders,” said John Willson, Placer Dome’s president, in a statement.

However, Highlands Gold, an Australian-based firm, continues to oppose the A75 cents-per-share bid. The company said it would take the offer to its shareholders.

“Directors believe the Placer offer price remains inadequate,” said Ian Goddard, Highlands’ managing director. He noted that Highlands’ shares have been trading

at A75 cents to A77 cents since the takeover was announced on Nov. 27.

He advised shareholders to wait for Highlands response, which will include a report from independent experts.

Placer Dome earlier threatened to withdraw the offer if Highlands continued with what the major described as “frustration tactics.” Placer Dome said discussions with the company prompted it to release the document, which contains details on its plans for Highlands.

Highlands, however, called on Placer Dome to release information regarding the exploration potential of the Porgera gold mine, which is owned by the companies and two other investors. No such information was made available by Placer Dome.

Highlands owns 25% of Porgera, a combined open-pit and underground operation in Papua New Guinea. That operation has produced more than 6 million oz. gold over six years. Placer holds an 18.8% stake there.

Placer did say it would review, however, the viability of the Nena project and the Ramu nickel project, also in Papau New Guinea.

Porgera’s proven and probable reserves stand at 78.7 million tonnes grading 4.5 grams gold per tonne, for 11.5 million oz. The project also contains measured and indicated resources of 16.4 million tonnes at 2.2 grams gold, based on a cutoff of 1.5 grams.

Porgera produced 848,872 oz. gold in 1995 at a cash cost of US$197.