Gold explorer Extorre Gold Mines (AMEX:XG) (NYSE MKT:XG) (TSE:XG) said Friday its board has approved a shareholder rights plan, effective today.
However, the plan is subject to shareholder ratification within six months in order to remain in place.
The plan is designed to protect shareholders and provide them with
adequate time to consider and evaluate any unsolicited bid made for the
The rights will become exercisable only if a person, together with
its affiliates, associates and joint actors, acquires or announces its
intention to acquire beneficial ownership of shares which when
aggregated with its current holdings total 20 per cent or more of the
company's outstanding common shares, other than by a "Permitted Bid",
The rights would entitle the holder to purchase Extorre common shares
at a substantial discount to their then prevailing market price.
Permitted bids under the plan must be made by way of a take-over bid
circular prepared in compliance with applicable securities laws, and be
made to all shareholders of the company for all common shares, and must
remain open for a minimum of 60 days.
The company said it plans to hold a shareholders' meeting to approve the plan within six months.
week, Extorre said it was “encouraged by many of the early results” as
it intersected more high-grade drill targets at its Cerro Moro project
in the Santa Cruz province of Argentina.
Significant results from in-fill holes that the company completed at
the Zoe target include hole MD1552, which intersected 5.00 metres at
54.0 grams per tonne (g/t) gold and 7,155 g/t silver (197.1 g/t gold
equivalent), including 2.45 metres at 109.3 g/t gold and 13,561 g/t
silver (380.5 g/t gold equivalent).
In early April, Extorre announced the results of a preliminary economic assessment for potential mine development at Cerro Moro.
The study, which was based on a NI 43-101 mineral resource estimate
from November, modelled a nine year mine to produce 850,000 gold ounces
and 47 million ounces of silver.
This proposed mine would produce an average of 248,036 ounces gold
equivalent per year for the first five years, at a cash cost of US$303
per gold equivalent, with a 1,300 tonne per day throughput.
In this scenario, the mine has a 24-month payback period and pretax
internal rate of return of 63 percent and a pretax net present value, at
a five percent discount, of $737.4 million.
At Cerro Moro, exploration with four drills is ongoing. The program
is designed to boost total resources and to in-fill some areas for mine
The November 2011 resource estimate for Cerro Morro gives indicated
resources of 1.35 million ounces gold equivalent, comprising 2.42
million tonnes (Mt) at 7.4 grams per tonne (g/t) gold and 498 g/t
silver, for a gold equivalent grade of 17.4 g/t.
In the inferred category, the new estimate consists of 1.05 million
ounces gold equivalent, comprising 4.74 Mt at 3.5 g/t gold and 172 g/t
silver for a gold equivalent grade of 6.9 g/t gold.