Maritime Resources (TSX-V: MAE) didn’t pull a lot of punches in encouraging its shareholders to reject the unsolicited acquisition offer put on the table on April 19 by Anaconda Mining (TSX: ANX). Anaconda made a hostile offer of 0.39 of a common share of ANX for each share of MAE owned. At the current value of the stock, Anaconda is willing to pay about 16 cents per MAE share, or approximately only $14.0 million.
In a letter to shareholders penned by Maritime chairman Allan Williams on behalf of the board, Williams told shareholders, "Don't be fooled by Anaconda's lowball, opportunistic share exchange offer."
A pre-feasibility technical report published in March shows that Maritime’s Hammerdown Mine outside of Springdale, Newfoundland and Labrador will produce 35,000 ounces of gold annually for the first five years of production. The pre-tax net present value of the mine using an 8% discount rate at $1,250 U.S. per gold ounce works out to $71.2 million and climbs to $92.6 million at $1,375 U.S. per ounce.
Worked as recently as 2004 by Richmont Mines, Hammerdown has historically produced 291,400 tonnes of ore at an average grade of 15.83 g/t gold, equating to 143,000 ounces of gold at an impressive 8.0 g/t gold cut-off.
In addition to reciting figures from the technical report showing how valuable reviving Hammerdown can be while touching on potential for the company’s Orion gold deposit and the seasoned leadership of Maritime, Williams systematically dismantled Anaconda’s business, noting the "depleting" reserves at its properties, a "shaky future," and that it needs capital as it is spending more than it’s making, which is probably going to lead to more dilution.
Williams also said that he thinks Anaconda’s share price is being artificially propped up by a favorable "sponsored" opinion piece on 321gold.com and because of a recent share consolidation.
"We are confident that you will conclude, as we have, that the Hostile Bid falls significantly short of providing fair value to Maritime shareholders and is an attempt by Anaconda to force Maritime to merge with Anaconda on unfair terms to the Maritime shareholders," said Williams.
Shares of MAE were down 4.55% on the day at 10.5 cents as Tuesday’s closing bell approached. Shares of ANX were down by 6.41% at 36.5 cents.
