The Yukon Supreme Court has approved Gold Fields’ acquisition of Bolivar, leaving Scion — a minority shareholder in Bolivar with roughly 19% of its common shares — to ponder the tenability of its position.
Steve Druskin, California-based Scion’s chief legal officer, says the investment firm is evaluating its options.
“We’re not sure if we’re done yet or not,” Druskin says. “It will depend on the judge’s reasons.”
Druskin says the judge has not released an explanation yet for his decision.
In court, Scion argued the process leading up to Jan. 12, 2006 shareholder vote — which came out in favour of the deal — was unfair and oppressive to shareholders.
Scion released a dissident proxy in late December of last year blasting the deal for undervaluing Bolivar, overplaying the political risk in Venezuela and neglecting the upside of the company’s Choco 10 mine in the South American country.
Choco 10 began production in August 2005. It processes 5,400 tonnes of ore per day and hosts a reserve of 1.3 million oz. gold; it is expected to produce 190,000 oz. gold in 2006.
For Scion, the Yukon defeat was the second time in a month it came up empty in a courtroom. Its case with the Ontario Superior Court — where it argued shares held by Gold Fields should not have been counted in the Jan. 12 shareholders’ meeting — was thrown out.
The judge said the case could only go forward if Gold Fields’ roughly 5.2 million voting shares were material to the outcome of the vote. But with roughly 76.6% approval from all shareholders (only two-thirds approval was needed), the Gold Fields shares were not decisive.
South African-based Gold Fields’ offer is for US$360 million, and is part of its strategy to increase its foreign production output by 1.5 million oz. by 2009.
Gold Fields shares rose roughly 6%, or US$1.28, to US$22.58 on the New York Stock Exchange on the news of the court decision.
The deal between the two gold companies is expected to be complete by the end of February.
Be the first to comment on "Bolivar and Gold Fields win Supreme Court ruling"