Crown Resources Weighs Merger Offer Battle Mountain Gold Submits Bid Worth $5.25 Per Share
Denver-based Crown Resources Corp. was weighing a merger offer Tuesday from its partner in developing Crown Jewel Gold Mine near Chesaw, Wash.
Late Monday, Houston-based Battle Mountain Gold Co. offered 0.4375 shares of its stock for every share of Crown Resources stock. That amounted to about $5.25 per share, a 40 percent gain for Crown stockholders from Monday’s Crown stock close.
Crown stock finished Tuesday up $1.25 at $5.
Both Crown and Battle Mountain are jointly developing the open-pit Crown Jewel Mine, now in the midst of a lengthy permitting process. Environmentalists have strongly objected to the project, which would involve controversial heapleach mining techniques.
A recent change in the agreement between Crown and Battle Mountain gives BMG the right to 54 percent of the first 1.6 million ounces the mine would produce, and 51 percent of the gold after that.
Battle Mountain simply wants to solidify its interest in the mine, said Les Van Dyke, director of corporate communications. If accepted, the merger would have little effect on the timetable for the start-up of the mine, scheduled for sometime during 1997.
“We’re still a long way from getting the permits for the mine,” Van Dyke said from Houston. The company had not heard from Crown about its board of directors’ decision late Tuesday.
“We think it’s a good offer for Crown, and a good offer for its shareholders,” Van Dyke said. “It gives them liquidity, and for us those are quality gold ounces we’d like to have.”
Crown’s president, Christopher E. Herald, did not return calls Tuesday. In a release, Crown officials called the merger proposal “unexpected.” The partners agreement for the mine prevents Battle Mountain or BMG subsidiaries from acquiring any Crown assets without Crown’s approval.
Shares of Battle Mountain Gold closed Tuesday at $12.13, up 13 cents.