Ventana Gold Corp. (TSX:VEN) is fighting back against a billion-dollar takeover attempt.
On Thursday the Vancouver-based company issued a statement encouraging its shareholders to reject an unsolicited buyout tendered by Brazil’s EBX Group.
EBX, which is owned by Brazil’s richest man Eike Batista, launched the offer through its Canadian affiliate AUX Canada Acquisition Inc. (See “Brazilian firm tenders $1.2 billion bid for Ventana Gold” – BIV Business Today, November 18.)
“The Ventana board is unanimous in its belief that the AUX offer undervalues Ventana and its world-class La Bodega project and fails to reflect the significant resource expansion potential at La Bodega,” commented Ventana chairman Richard Warke.
La Bodega, which is located in northern Colombia’s California district, is estimated to hold some 3.5 million ounces of gold, 19.2 million ounces of silver and 84.6 million pounds of copper.
The bid comes during a year when gold prices have increased approximately 30%, silver prices have soared 69% and copper prices have climbed 33%.
On Thursday, the price per ounce of gold was valued at $1,378. Ventana has said La Bodega will produce 301,000 ounces of gold annually at a cash cost of $322 per ounce.
The company has since issued a directors’ circular that details the board’s reasons for rejecting the offer, but it is not the first time Ventana has attempted to block the takeover.
On December 3, the company adopted a poison pill strategy in response to EBX’s bid.
Hours later, the Toronto Stock Exchange deferred the strategy, saying it automatically does so when such a plan is adopted after a takeover bid.
The EBX offer values Ventana at $12.63 per share, and is open for acceptance until January 24.
EBX already owns 19% of Ventana, according to a September company report.
At press time, Ventana’s shares were up $0.24 to $13.29.