TORONTO – Augen Gold Corp. (TSXV:GLD) says its board unanimously recommends shareholders reject a $55 million takeover offer by Trelawney Mining and Exploration Inc. (TSXV:TRR) because it undervalues the company.
Trelawney’s recent offer is “opportunistic,” and “financially inadequate,” Augen said in a statement Wednesday.
Augen Gold said its board found that Trelawney’s offer doesn’t reflect the value of Augen’s exploration record and land position in the South Swayze Greenstone Belt in northern Ontario.
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Trelawney’s goal is to consolidate ownership of land around its Chester project in Ontario.
Augen Gold also said Trelawney’s bid comes with numerous conditions that don’t comply with Augen’s shareholder rights plan.
Earlier this month, Augen Capital Corp. (TSXV:AUG), which owns 23 per cent of Augen Gold, said it entered into a lock-up agreement with Trelawney.
The announcement came after an apparent miscommunication between Trelawney and the junior gold miner.
Trelawney said earlier that it hadn’t been able to negotiate an agreement with Augen’s management. But Augen said it received Trelawney’s proposal at 4:51 p.m. on a Friday and its attempts to engage in meaningful discussions were “rebuffed.”
Trelawney had said it intends to offer 0.066 of a Trelawney share for each Augen share it doesn’t already own.
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