Aim-listed miner SolGold said today it is recommending shareholders vote against an offer from BHP Billiton – causing its share price to rocket 12.6 per cent.
The group revealed BHP offered $30m (£24m) for a 10 per cent stake in SolGold, implying a value of $0.22 per share. The stock is currently at $0.1869.
BHP also proposed an earn-in deal, under which it will acquire 70 per cent of SolGold's interest in the Cascabel Project in Ecuador for $275m.
However, the SolGold board has rebuffed the offer, and said there are too many conditions attached to it.
"There is no certainty the BHP Proposal would be consummated on the terms proposed given the number of key documents that would need to be completed: earn-in agreement, private placement, shareholder agreements," the firm said.
The group added that, "most importantly", the offer is "not a superior proposal in comparison to the previously announced $33m financing with Maxit and Newcrest".
"We are very pleased to see BHP join a growing list of international mining companies that are interested in investing in SolGold; however, the current $33m financing with Maxit and Newcrest is the preferred option at this time as it leaves us in control of this very exciting project at Cascabel," said executive director Nick Mather.