* Capital continues to back Gammon offer
* Gammon deal worth about $329.6 million
* Timmins deal worth about $365.8 million
(In U.S. dollars unless noted)
TORONTO, March 17 Capital Gold CGC.A
reiterated its support for a takeover offer from Gammon Gold
GAM.TO on Thursday, even though rival bidder Timmins Gold
TMM.V boosted its offer by 25 cents a share.
Timmins and Gammon have been caught up in a bidding war to
gain control of Capital Gold, and its El Chanate mine in
Mexico, since October.
Vancouver-based Timmins, armed with the backing of one of
Canada's top resource investors, is offering 2.27 Timmins
common shares plus $0.25 in cash.
Larger rival Gammon has offered $1.09 per Capital share,
plus 0.5209 of a Gammon common share.
"The board has carefully considered both proposals and
believes that the Gammon transaction continues to be the best
transaction reasonably available to its stockholders," said
Capital Gold Chairman Steve Cooper in a statement.
With 61.37 million Capital Gold shares outstanding, the
Timmins offer would value Capital at about $365.8 million,
while the Gammon offer would value it at about $329.6 million,
although those values vary considerably as share prices rise
Capital said it would convene a shareholders' meeting
scheduled for Friday as it works with Gammon on an amended
Shares of Gammon Gold were down slightly at C$8.14 on
Thursday on the Toronto Stock Exchange, while Timmins Gold rose
2.48 percent to C$2.48. Capital Gold rose 1.34 percent to $5.28
on the NYSE Amex.
(Reporting by Julie Gordon; editing by Peter Galloway)