Ecuador-focused explorer SolGold (LON, TSX:SOLG) said Friday it was "surprised and disappointed" at how quickly Cornerstone Capital Resources (TSX-V:CGP) dismissed a takeover approach, adding that it will bring the offer directly to the target's shareholders.
Last month, SolGold put forward what it called a "premium" offer for Cornerstone's 15% share of the Cascabel copper-gold project in exchange for shares. Less than three hours later, the Canadian firm declined the bid.
"Was there time that early in the morning to actually make contact with the shareholders representing more than 50% of those outstanding? Did Cornerstone have time to hold a board meeting to consider the offer between the time board members woke up in the morning and the time the press release was issued?" SolGold questioned in today's statement.
It took Cornerstone less than three hours to dismiss SolGold's offer for the 15% stake in the coveted Cascabel copper-gold project.The company believes consolidating the ownership of Cascabel into one company makes "eminent" sense, and it said it has attempted to do this with Cornerstone in both 2017 and 2018.
SolGold noted it believed all Cornerstone shareholders should be given the opportunity to make an informed decision, and that an independent review should be conducted by the company's board.
Ontario-based Cornerstone handed SolGold an initial 20% of Cascabel, one of the few new copper-bearing projects expected to come online in the near future, with an earn-in option over four years in 2012.
The asset now has a mineral resource of 2.95 billion tonnes at 0.52% copper, with $117 million spent on exploration.
Cascabel has attracted quite a few major miners and boosted SolGold's position in the global market.
Australia's largest gold producer, Newcrest Mining (ASX: NCM), upped its stake in SolGold in December to 15.33% from 13.83%, to secure a portion of Cascabel.
SolGold believes consolidating the ownership of Cascabel into one company makes "eminent" sense.The move further boosted Newcrest's position in SolGold against No.2 shareholder, BHP, which in September had bought a 6.1% stake in the explorer.
Ecuador has gained ground as a mining investment destination in the past two years, thanks to a revised regulatory framework and a major investor engagement campaign.
Almost a year ago, Newcrest Mining took a 14% stake in Lundin Gold, which expects to bring its Fruta del Norte gold and silver mine in southeastern Ecuador into production by the end of 2019.
Anglo American (LON:AAL) also landed in the South American country last year. Through a deal with Canada's Luminex Resources (TSX-V: LR), it plans to develop two copper and gold concessions there.
Currently, the nation's emerging mining sector employs 3,700 people, but estimates the figure will rise to about 16,000 by 2020.
SolGold has a 100% interest in 12 copper-gold targets in Ecuador, which it says is under-explored compared to Chile, the world's top copper producer. The company also has assets in the Solomon Islands and Australia.