Ungava Minerals has advised its shareholders to take no action in response to Canadian Royalties (CZZ-V) unsolicited take-over bid for just less than 9.3 million or 51% of Ungava’s outstanding shares.
Ungava says its board of directors will review the offer and determine the appropriate course for shareholders. The board plans on making its recommendation by the end of business on July 3.
On Wednesday, Canadian Royalties launched a 10-per-share cash bid for 51% of the outstanding common shares of Ungava Minerals.
If its bid proves successful, Canadian Royalties plans to replace Ungava’s current management team and board of directors. The company is seeking to oust Ungava’s management since the group has not acted in the best interest of its minority shareholders. The company also claims that Ungava has twice jeopardized its interest in the Expo-Ungava property by failing to maintain its corporate filings in a timely manner and by failing to pay renewal fees for its permits for the property.
Canadian Royalties can earn a 70% stake in the Expo Ungava property by spending $1.7 million over four years. It can boost its stake to 80-% by completing a bankable feasibility study.
The property is host to a resource of 17 million tonnes grading 0.6% nickel and 0.8% copper, originally estimated by Amax in 1970. Included is a higher-grade core of some 3 million tonnes grading 1% nickel and 1% copper.
Canadian Royalties’ offer will remain open for at least 35 days. If the offer receives more than 51% of Ungava’s outstanding shares, the offer price will be diluted in proportion to the total number of shares tendered.
The offer is subject to at least 51% of Ungava’s outstanding shares being tendered, and Ungava not implementing its proposed shareholder’s rights plan.
Be the first to comment on "Ungava urges no action"