Battle for CapGold Rages On

Canadian miner Timmins Gold has raised its offer for US-based Capital Gold. Both operate in Mexico. Under the increased offer, CapGold shareholders will now receive a total of $5.89 per each of their shares, or a total of $371m. Timmins says the new offer “exceeds the value of the Gammon offer by 8.7%, per CapGold share, based on closing prices on March 14.” In October, Gammon, also based in Canada, offered to acquire CapGold for $288m or $4.57 per share. CapGold has turned Timmins away 4 times. Timmins is now backed by Canada’s Sprott Asset Management, which holds about 13% of CapGold and has voted against Gammon’s offer. Sprott’s stake represents the largest single voting block. A unit of Sprott, Sprott Resource Lending Partnership, has agreed to provide Timmins Gold with a CAD15m credit line and a CAD5m working capital facility. Availability under the credit line and working capital facility is not contingent on completion of the merger of Timmins Gold and Capital Gold, Sprott says. Gammon’s financial advisors are Dundee Securities and UBS, while CapGold’s is Comark Securities. New York’s Innisfree M&A is advising Timmins.