Titan Minerals Ltd. said Sept. 16 that it intends to lodge a formal offer to acquire Core Gold Inc. after its initial bid failed to get approval from the British Columbia Supreme Court.
The court denied the deal in July, citing Core's failure to satisfy its burden of proof to establish that the deal is fair and reasonable. This came after former Core CEO Keith Piggott urged shareholders to vote against the deal after revealing "disturbing" details about Titan's Tulin gold processing plant in Peru, which Titan recently agreed to sell to an unrelated party for US$1, according to a separate release.
After the failed deal, Core said it would restart a strategic review process that started in 2017. The proposed merger aims to form a gold explorer, developer and producer holding Titan's assets in Peru and Core's Dynasty Goldfield gold-silver project in Ecuador.
Under the new offer, each Core shareholder will receive 2.5 Titan shares for each Core share held, valuing Core shares at 42.2 Canadian cents apiece, a 164% premium over Core's closing price on Sept. 13, the last trading day before the deal announcement. In the previous bid, Core shareholders were offered 20 Titan shares for each Core share held, which was a 45% premium to Core's closing price.
As part of the deal, Titan agreed to acquire Core Gold's outstanding debt comprising US$1.5 million in promissory notes and US$1 million in convertible notes. Full details of the new offer will be released in a formal takeover bid circular to be submitted to regulators within the next several weeks.
Meanwhile, Titan notified lenders to extend the repayment date of its US$3 million secured debt facility to December. The company also looks to relinquish its remaining two tenements in the San Santiago property and plant.
