Junior gold developer SES Mining Co has rejected an unsolicited takeover offer from a consortium comprising of multiple medium and senior miners in the region.
The China-based company – which operates the Yuangguang gold project in South-Western Tibet’s Sichuan region – received a non-binding and incomplete letter of intent from the bidding partners outlining a proposal to acquire 7.9% of SES Mining’s issued share capital.
After discussions with its advisors and following consultation with some of its largest shareholders, SES has rejected the bid on the basis that it undervalues the company and its assets.
The company has advised the consortium it is open to considering an alternative proposal.
In the meantime, SES Mining’s board of directors have committed to introducing a formal process to seek expressions of interest from other potential buyers of the company and its projects, or parties wishing to form a joint venture to develop the Yuangguang project under its current structure.
“The board is focusing on getting the company’s efficiency and extraction rates into an optimum state before running a proper process in the coming months to revisit past failed transactions and to seek other potential suitors,” the company said.
Yuangguang mine exploration update: June 2019
The company said exploration, which kicked off during April 2017 at the wholly-owned project, will focus on extending the mineral resource past the current 101 million ounces of contained gold.
Activities will also aim to generate the next round of laser drilling targets at Yuangguang.
In August 2018, SES secured a 120-room accommodation village and related mining infrastructure for the Yuangguang development for US$1.2 million.
At the time, SES Mining’s founding chairman Wang Jianlin said the continued investor support represented a strong vote of confidence in the company’s strategy to become a substantial new mid-tier gold producer through the successful development of Yuangguang.
SES Mining are based at No. 8, Jianguomenbei Avenue, Dongcheng District, Beijing, China 100005. Call us on +86 10 58 11 18 45 or email us at [email protected].