JOHANNESBURG (Reuters) -South Africa's AngloGold Ashanti Ltd said on Tuesday it had offered to buy all the shares it does not already own in Canadian bullion miner Corvus Gold Inc as it seeks to expand its ore reserves.
The Johannesburg-listed company has shed most of their South African assets to focus on higher returns in both North and South America, sources said, as mining companies in South Africa struggle with rising costs, volatile labour relations and power disruptions.
The proposed takeover will be an all-cash deal and at a premium of 55% to the market price of C$2.58 ($2.06) of Corvus as of May 5, a day before AngloGold, which already owns 19.5% of Corvus, guaranteed the company a $20 million loan, entering a 90-day exclusivity period during which it could conduct due diligence of its assets.
Corvus's share price has risen around 27% since May to around C$3.27.
The deal values Corvus, a Toronto-listed gold and silver explorer and developer, at around $370 million.
"Management and the board of directors, in accordance with their fiduciary duties and consistent with their commitment to maximize shareholder value, are reviewing the proposal and have no further comment at this time," Corvus said in response to the bid.
Corvus Gold is the owner of a sizeable land package in the Beatty District in the U.S. state of Nevada with areas contiguous to AngloGold's Silicon, Transvaal and Rhyolite exploration assets, RBC Capital Markets analysts said.
AngloGold said the acquisition, which would be the first in ten years, further consolidates one of the largest new gold districts in Nevada, and provides an opportunity to establish, in the medium and longer term, a low-cost, long-life production base in a premier mining jurisdiction.
AngloGold has this month appointed Colombian Alberto Calderon as its new chief executive, after a 10-month search.
It has been at the centre of takeover speculation itself, with Sibanye-Stillwater boss Neal Froneman floating the idea of a merger in March.
($1 = 1.2509 Canadian dollars)
(Reporting by Clara Denina and Promit Mukherjee; Editing by Marguerita Choy)