Australian gold miner Noble backs Chinese bid over domestic rival

SYDNEY Thu Oct 25, 2012 8:23pm EDT

SYDNEY Oct 26 (Reuters) - Australian gold miner Noble Mineral Resources Ltd said on Friday it favoured a plan by China's Zhongrun Resources Investment Corp to buy a stake in the company over a rival offer from Resolute Mining Ltd.

Noble said Zhongrun's A$85 million ($88 million) offer for a 42 percent stake in the company, made last month, continued to be in the best interests of all shareholders.

"Noble has a number of fundamental concerns regarding the unsolicited and incomplete proposal put forward by Resolute," Noble Managing Director, Wayne Norris said in a statement.

"It is of inferior value to Zhongrun's proposal, does not provide the immediate funding certainty that the Zhongrun proposal does, and would leave the Company highly geared by comparison."

Resolute on Thursday said it had reached agreement with some Noble shareholders to acquire just under 20 percent of the company in exchange for Resolute shares and offered Noble A$85 million in financing through two issues of convertible notes.

Noble, which wants the money to fund the ramp-up of its Bibiani mine in Ghana to produce 150,000 ounces of gold a year and pay down debt, is facing objections from some shareholders who do not want their stakes diluted by Zhongrun.

Resolute' s agreement with some Noble shareholders involved issuing one Resolute share for every 12 Noble shares, implying a share price of A$0.15 per Noble share based on Thursday's close.

Norris said any delay in receiving Zhongrun's equity "may be detrimental to Noble's ability to meet existing liabilities and fund ongoing activities" and urged shareholders to vote in favour of the plan at the company's annual meeting on Oct. 31. ($1 = 0.9649 Australian dollars) (Reporting by Lincoln Feast; Editing by Edwina Gibbs)

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