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Wednesday, 21st December 2005 (4438 views)

South African gold miner Gold Fields' attempt to grab Venezuela-based Bolivar Gold has received a blow as its target's largest shareholder expressed dissent at the move.

Bolivar's management agreed to the $330 million all-cash bid last month and the acquisition awaits shareholder approval on January 12th.

But fund manager Scion Capital has written a circular to shareholders arguing that the bid does not represent shareholder value.

Citing the rising price of gold, Scion – which owns a 19 per cent stake in Bolivar - is urging shareholders to snub Gold Fields' advances.

"Gold Fields stands to reap the upside that Bolivar security holders had expected, and Bolivar security holders should be compensated more for forfeiting the opportunity to Gold Fields' shareholders," said Scion.

Canada-quoted Bolivar's Choco 10 mine in Venezuela is expected to produce 190,000 ounces of gold in 2006 and the company has reserves totalling around 1.3 million.

Gold Fields, the world's fourth largest gold producer, wants Bolivar on board to help it produce 1.5 million more ounces of gold by 2009 and reduce its exposure to South Africa.

 

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