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Proxy advisories support Zijin's Guyana Goldfields buy

Proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis & Co have given the thumbs up to Zijin Mining Group’s proposed C$323 million takeover of Guyana Goldfields.
Proxy advisories support Zijin's Guyana Goldfields buy Proxy advisories support Zijin's Guyana Goldfields buy Proxy advisories support Zijin's Guyana Goldfields buy Proxy advisories support Zijin's Guyana Goldfields buy Proxy advisories support Zijin's Guyana Goldfields buy

Two major proxy advisory firms have given their respective thumbs up for Zijin Mining's Guyana Goldfields buy

Staff Reporter

ISS concluded shareholders would cash out of their investment at a significant premium, with certainty of value and immediate liquidity.

Glass Lewis said the proposed transaction appeared to be the result of a robust and competitive process. "We see no reason to doubt that it likely represents the most favourable offer available at the present time."

Guyana Goldfields owners will consider the deal during an upcoming vote, with a proxy deadline set for July 23.

Zijin's C$323 million offer triumphed over a competing SilverCorp Metals offer, more than tripling the original bid made for the company in April. Zijin will pay $1.85 per share in cash, a 35% implied premium to the SilverCorp cash and stock offer, which the original bidder decided not to match.

Zijin also agreed to provide Guyana Goldfields with a US$30 million secured loan facility to finance ongoing operations of the Aurora gold mine in Guyana and to fund its other liquidity needs, which now include a C$9 million break fee payable to SilverCorp.

Guyana Goldfields shares languished at around C35c until the SilverCorp offer in April and then a subsequent offer by Gran Colombia Gold, which prompted SilverCorp to improve its offer. Following news of a new bid, it jumped to over $1.70, a 365% gain over about six weeks.

At Wednesday's $1.78 close - up 154% in the year to date - Guyana Goldfields had a market value of $311 million (US$230 million).