Back to Africa

as Gryphon makes play for Shield

KATE EMERY, The West Australian July 1, 2010, 7:49 am

Consolidation among West African gold players is back in the spotlight, with Gryphon Minerals unveiling a friendly scrip bid for Shield Mining that is intended to create a $200 million gold explorer.

Gryphon, which owns the 1.1 million ounce Banfora gold project in Burkina Faso, has already secured a 19.9 per cent foothold in its $23 million target under a pre-bid acceptance deal with several Shield backers.

Gryphon managing director Steve Parsons said deal would give Gryphon an exploration footprint in Mauritania, where Shield owns assets near First Quantum’s producing Guelb Moghrein copper-gold mine.

“We are well resourced and capable of aggressively exploring (Shield’s assets),” he said.

“This acquisition delivers a potential pipeline of new opportunities in another West African country and fits with our strategy to build an important gold company in the region.”

Corporate activity among WA’s West African-focused explorers has long been talked about but few deals have fallen over the line, with an exception in Barrick Gold’s $80 million play for Perth junior Tusker Gold earlier this year.

Gryphon’s modest move is likely to refocus attention on consolidation in the continent, where global miners Barrick, AngloGold Ashanti, Randgold and Lihir are all regarded as potential predators.

Gryphon’s 1-for-3 scrip bid will include a 1-for-11 offer for 21.3 million Shield options with a strike price of 20¢, valuing Shield at 27.2¢ a share.

Former Equigold director and Shield chief executive David Netherway, who plans to join Gryphon’s board as a non-executive director, said the agreement made “excellent sense”.

The offer has been unanimously recommended by the Shield board. It remains subject to a number of conditions, including 90 per cent minimum acceptance.

Shares in Gryphon last traded at 81.5¢ and Shield at 20¢. News of the bid was released after market close late yesterday.
Sourced & published by Henry Sapiecha

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