Out of nowhere, China Gold Stone Mining Development Ltd. made a cash tender offer of $7.50/share for all of the outstanding shares of Allied Nevada Gold Corp. At the time of the offer, Allied Nevada’s stock was trading at $4.30/share. Allied Nevada operates the Hycroft mine along with an additional seven development projects, all of which are located in Nevada. China Gold Stone, according to its press statement, is registered in Hong Kong and owns three gold mines in China, with a total value of approximately $15 billion.
Citing a lack of transparency and legal concerns, stunned Allied Nevada officials have refuted the announcement cautioning shareholders and notifying regulators. Although the Reno-based Allied Nevada acknowledged receiving a tender, officials emphasized that China Gold Stone has provided neither “substantive published information” on its own operations and corporate structure, nor any detailed information outlining sufficient “resources to complete the transaction.”
Allied Nevada representatives added that no tender offer has commenced under U.S. federal securities laws. Further irregularities indicate an expiry date contravening U.S. and Canadian law and the proposal does not provide any certainty or commitment. Allied Nevada has contacted the U.S. Securities and Exchange Commission and the Ontario Securities Commission officials with its concerns about the validity and legality of the announcement and the proposal.