June 30, 2020 / 1:27 PM / 4 days ago

BHP-backed SolGold makes second attempt on Canada's Cornerstone

(Reuters) - BHP-backed SolGold Plc (SOLG.L), the copper-gold company focused on Ecuador, is making a second attempt to take over Canada’s Cornerstone Capital Resources (CGP.V), whose largest shareholder said the approach is likely to be rebuffed.

The all-stock transaction of 11 SolGold ordinary shares for each Cornerstone share represents a premium of around 22% to the company’s closing price on Monday, SolGold said in a statement.

Shares of Cornerstone gained 13.5% to C$3.62 in Toronto.

At a market capitalization of C$103.1 million ($75.35 million), Cornerstone has an 8% stake in SolGold, making it its fourth biggest shareholder, and 15% of the Ecuadorian entity owning the Cascabel project.

It also has other gold, silver and copper projects in Ecuador and Chile.

SolGold in May announced a financing package of up to $150 million with streaming company Franco-Nevada Corp to develop its Alpala project.

Its previous offer for Cornerstone in February 2019, representing a premium of around 20%, was rejected on the grounds that it was undervalued.

“The previous proposal was dead on arrival. I expect it will be the same this time around,” said Maxit Capital Chief Executive Bob Sangha, who owns a 19.4% stake in Cornerstone, according to Refinitiv.

BHP (BHP.AX), (BHPB.L), the world’s biggest miner, owns 15.31% of SolGold, while Australian gold miner Newcrest Mining Ltd (NCM.AX) owns 15.23%, Refinitiv data shows.

Reporting by Clara Denina; additional reporting by Jeff Lewis; editing by Barbara Lewis and Richard Chang

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