The board of SolGold Plc has rejected an investment proposal by BHP Billiton Group after determining that the BHP offer is not superior in comparison to the previously announced US$33 million financing with Maxit Capital LP and Newcrest Mining Ltd.
According to an Oct. 10 news release, the global mining giant offered an investment of US$30 million in SolGold against a 10% stake and a right to appoint a director to the latter's board.
BHP also offered to spend US$275 million for the Cascabel copper-gold porphyry project to acquire SolGold's 85% interest in Exploraciones Novomining SA, which holds the Cascabel project tenements.
SolGold attributed the decision to reject BHP's proposal being highly conditional, nonbinding and subject to due diligence. It also calls for the withdrawal of the financing arrangement with Maxit Capital and Newcrest Mining.
The SolGold board has unanimously recommended that shareholders approve the US$33 million investment at the Oct. 13 meeting.
Following the superior investment proposal from Maxit Capital in September, Newcrest Mining said it would also subscribe to SolGold shares at 16 cents per share, up from a previous offer of 8 cents each.