U.S. Gold stalled in takeover bids (June 26, 2006)

U.S. Gold (USGL-O) has withdrawn its takeover offer for White Knight Resources (WKR-V, WITNF-O) in response to an opinion from the United States Securities and Exchange Commission that the offer had not been properly registered.

The SEC had ruled that U.S. Gold’s tender offer for White Knight should have been registered before it was launched, and that the registration statement should have contained financial information that was not in U.S. Gold’s submission. U.S. Gold said it was acting in good faith and that it had not been able to get the information.

U.S. Gold plans to launch formal offers for White Knight, Nevada Pacific Gold (NPG-V, NVPGF-O), Coral Gold Resources (CGR-V, CGREF-O) and Tone Resources (TNS-V, TONRF-O) once it has satisfactory documentation for the Commission.

In March, U.S. Gold announced it was bidding for all four companies to consolidate a large land package in the Cortez gold trend in northeastern Nevada. It was offering 0.35 of a U.S. Gold share for one share of White Knight, 0.23 of a share for one Nevada Pacific, 0.63 of a share for one Coral Gold, and 0.26 of a share for one of Tone Resources.

Robert McEwen, U.S. Gold’s chairman, lamented the “lack of co-operation” from the targets of the bid.

Both White Knight and Nevada Pacific released statements that said they were broadly supportive of the U.S. Gold offer, and Nevada Pacific said that it and Coral Gold had a valuation of their Nevada properties under review that would meet one of the regulatory requirements for the bid.

White Knight, whose board had refused to recommend the U.S. Gold offer in mid-May because of the regulatory hitches, said it would be co-operating with U.S. Gold to help the bidder meet regulatory requirements, but that it was also ready to start work on its own properties. Currently, it plans a 9-hole reverse-circulation drilling program at the Gold Bar Horst prospect, 50 km northwest of Eureka. Five other properties are drill-ready and White Knight has a 20,000-metre drill program budgeted.

Coral released results from two holes at its Robertson property just northeast of the Pipeline deposit. One hole cut 33 metres grading 1.5 grams gold per tonne and the other 40 metres grading 1.7 grams per tonne.