Blue Note sounds off on Gold Hawk

Blue Note Mining (BNT-V) is ramping up the war of words against Gold Hawk Resources (GHK-V).

Montreal-based Blue Note has been trying to convince Vancouver-based Gold Hawk that the companies should merge so that their adjacent properties in Val d’Or, Quebec could be advanced.

But Gold Hawk has not shown any signs of warming to the overture, which was first made in the summer of last year, and its coolness to the idea has led Blue Note to file a dissident proxy that seeks to replace Gold Hawk’s current board.

Gold Hawk’s response to the filing of the dissident circular was to postpone the very shareholders meeting that would vote on the composition of the board until August 17 – it was originally scheduled for June 10. It said the postponement would give it more time to fully consider the dissident circular and re-issue management information circular.

But the delay only served to stoke Blue Note’s frustration. It says the postponement only means that Gold Hawk’s “valuable cash” continues to diminish thus reducing its attractiveness as a future merger partner.

Blue Note went on to assert that the board of Gold Hawk lacks a clear plan and sees evidence of this in its postponement of the shareholders meeting.

“If Gold Hawk had a plan, the postponement of the originally scheduled shareholder meeting would be completely unfounded as there is more than sufficient time available for the Gold Hawk board to respond in detail to shareholders,” the company said in a statement.

Blue Note wants a merger of the two companies through a stock swap that would see 16.67 of Blue Note shares exchanged for each Gold Hawk share.

In Toronto on May 28 Gold Hawk shares were off 7% or 8¢ to $1.01 while Blue Note shares were up half a penny to 8.5¢. Gold Hawk has just 13 million shares outstanding while Blue Note has 104.7 million shares outstanding.

Despite the discrepancy in equity structure, Blue Note argues a merger would unlock certain synergies.

“We believe that merging the two companies is a natural fit and that it will allow both Blue Note and Gold Hawk shareholders to benefit from any near-term gold production and cash flow through the opening of Blue Note’s Croinor Gold Project,” Blue Note’s president and chief executive Michael Judson said in a news release.

Blue Note owns roughly 2% or 283,900 shares in Gold Hawk and is proposing a five-director slate that includes its president and chief executive Michael Judson.

Gold Hawk owns the Barry-Souart property which is adjacent to Blue Note’s Croinor Gold Project.

If the Offer is accepted, Blue Note would use the cash that Gold Hawk has in its coffers to push Croinor into production, consolidate other Val-d’Or-based gold deposits and look at mergers and acquisition opportunities in Latin America.

As of Dec. 31 2009 Gold Hawk had $13.4 million in cash and cash equivalents.