Ventana Gold Corp. (TSX:VEN) became the target of a $1.2 billion takeover attempt this week, 10 days after the company released a resource estimate for its La Bodega project in Colombia.
On Wednesday, Brazil’s EBX Group launched a bid for the Vancouver-based explorer that sent Ventana’s stock up 38% to close at $12.87.
EBX has investments in a number of industries that include mining, energy, logistics and oil and gas.
In response to the bid, Ventana issued a short release that said the offer was unsolicited and asked shareholders to not take any action.
“The Board of Ventana has commenced the process of engaging advisers to assist it in responding to this bid. The board will make every effort to maximize value for the benefit of Ventana's shareholders and will update its shareholders from time to time as this development progresses,” the company said.
On November 8, the company issued a 43-101 compliant mineral resource estimate for La Bodega, which is located in the California district of northern Colombia.
The report, which is a regulatory requirement for Canadian mining companies, estimated that La Bodega contains 3.5 million ounces of gold, 19.2 million ounces of silver and 84.6 million pounds of copper in an inferred category.
The report envisioned a startup cost of $297 million with a 14-year mine life.
Ventana also said the average cash cost per ounce of gold would be $322 for the first six years.
The bid for the Vancouver company comes at a time when mining houses the world over are on the hunt for highly prospective gold deposits while the precious metal trades are at record highs.
In recent months, both Vancouver-based Goldcorp Inc. (TSX:G) and Red Back Mining Inc. have been involved in multi-billion-dollar takeover deals. (See “Kinross spending US$7.1 billion for Vancouver gold miner ” – BIV Business Today, August 4 and “Goldcorp snaps up Andean in $3.6 billion deal ” — BIV Business Today, September 3.)
At press time, Ventana’s shares were trading at $13.75.