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Gran Colombia, Gold X's 'LatAm gold champion' plan falls through

Canada-based Gran Colombia Gold and Gold X Mining’s plans to create a new Latin American-focused gold champion have fallen through after Gran Colombia walked away from its proposed acquisition of Guyana Goldfields.
Gran Colombia, Gold X's 'LatAm gold champion' plan falls through Gran Colombia, Gold X's 'LatAm gold champion' plan falls through Gran Colombia, Gold X's 'LatAm gold champion' plan falls through Gran Colombia, Gold X's 'LatAm gold champion' plan falls through Gran Colombia, Gold X's 'LatAm gold champion' plan falls through

Guyana Goldfields' Aurora mine faces an ore supply gap and funding shortfall for its new life-of-mine plan

Staff Reporter

Completion of the Guyana Goldfields acquisition was a condition for the concurrent acquisition of Gold X.

Guyana Goldfields has rejected Gran Colombia's acquisition proposal and instead signed an amended agreement with Silvercorp Metals, which sweetened its offer to C$1.30 a share. Gran Colombia said on May 11 it had offered to buy Guyana Goldfields, which owns the Aurora mine, at an exchange ratio of 0.142 of scrip for each Guyana share held, implying a value of 90c per share.

Gran Colombia president Serafino Iacono said at the time the proposed transaction would create a new "Latin American gold champion with Latin American operators and mine builders".

Silvercorp owns 9.48% of Guyana Goldfields, and upon closing of the $227 million cash-and-scrip deal, would leave Guyana Goldfields owners with 14.4% of the company.

Guyana Goldfields favoured the Silvercorp deal since its troubled Aurora mine faced a funding shortfall for a new life-of-mine plan. The company has said it would benefit from Silvercorp's underground experience and strong balance sheet.

Guyana Goldfields shares (TSX:GUY) were down 3.1% Monday at C$1.25, which capitalises the company at $218 million (US$156 million).