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European Goldfields confirms third-party discussions

European Goldfields says it has received third-party approaches.

Rick Bowmer/Associated Press/Rick Bowmer/Associated Press

A Yukon gold company that wants to mine the metal in Greece, backed by money from Qatar, has been approached by multiple third-parties about other "potential corporate transactions."

European Goldfields Ltd. , registered in Whitehorse, with headquarters in London, England, made a deal in early October for a $750-million injection from Qatar's sovereign wealth fund, cash that would make two proposed gold mines in Greece a reality. And there was an added political dimension, with Qatar having previously pledged to help Greece through its financial woes.

The deal predictably sparked interest from other companies, such as Eldorado Gold Corp. , a larger Vancouver miner with operations in Turkey and plans in Greece. In the summer, an unnamed source told Reuters an unspecified Eldorado proposal reached the European Goldfields boardroom.

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On Tuesday, a story posted online, with no named sources, by Sky News in England, revived the chatter. The report said Eldorado had made an offer to buy European Goldfields, though noted it may have been some time ago and added there are no active talks.

The rumour spiked European Goldfields stock 15 per cent higher on the Toronto Stock Exchange Tuesday, and the stock was halted 23 minutes after the open. European Goldfields then issued a statement saying it had "received preliminary and indicative approaches from third parties regarding potential transactions." Trading resumed shortly after noon, eastern time, and the stock closed up 22 per cent.

A source – described as close to the situation – told Reuters that Eldorado was only one of several parties to have approached European Goldfields. The source said no talks are under way, which suggests the Qatari deal – to be voted on by European Goldfields shareholders on Dec. 22 – will proceed.

An Eldorado vice-president of investor relations said on Tuesday that the company does not comment on rumours. Eldorado has a market value of about $10-billion, roughly five times that of European Goldfields.

The deal with Qatar would eventually make the sovereign wealth fund the largest shareholder of European Goldfields. The company has nominal ties to Canada, with a registered office in Whitehorse, and a listing in Toronto. The junior miner believes its Greek projects would make it the largest gold miner in Europe, and a mid-tier player internationally.

With files from Reuters

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About the Author
National correspondent, Vancouver bureau

David Ebner is a national correspondent based in Vancouver. He joined The Globe and Mail in 2000 and worked in Toronto and Calgary before moving to Vancouver in 2008. He has reported on a wide range of stories – business, politics, arts, crime – and has covered sports since 2012. More

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