Viceroy out of MK Gold deal

Toronto-listed Viceroy Resource will not proceed with the private purchase of 9 million common shares representing 46.4% of MK Gold (NASDAQ).

The deal involved Morrison Knudsen (NYSE), MK Gold’s largest shareholder. A share purchase price was set at US$4.75 each for a total cash price of US$42.7 million plus 1.7 million non-transferable warrants of Viceroy, exercisable at $8 per share.

Viceroy informed Morrison Knudsen that it was unable to obtain financing for the purchase, and this notice terminated the purchase agreement. Gordon Fitzpatrick, Viceroy’s vice-president of corporate relations, explained that market conditions are not conducive to proceeding with the transaction at this time.

Morrison Knudsen is continuing to evaluate alternatives with respect to its 46.4% interest in MK Gold.

Meanwhile, William Agee, chief executive officer of Morrison Knudsen, was ousted from the company following a board of directors meeting last week. The engineering and construction company, based in Boise, Idaho, reported losses of US$43.7 million for the past two quarters, with additional losses expected for the fourth quarter. Agee was replaced by two temporary appointees, while a search gets under way for a permanent replacement.