Underworld Resources (TSX: V.UW, Stock Forum) shares jumped sharply after it announced Kinross Gold (TSX: T.KGC, Stock Forum) had made a friendly takeover bid for the company.

The offer of 0.141 of a Kinross common share, plus a penny in cash per Underworld share represents a 36% premium on Underworld as of the close on March 10, 2010. Kinross already held 8.5% of the company.

Underworld has a 100% interest in the White Gold property in the Dawson Placer district Yukon.

While the market liked the deal and sent shares 36% higher, not everyone was overjoyed at the offer, with some on the company Bullboard, including Teatimenow,cisco3 and goldplay wondering whether another entity would make a higher offer.

BFREE2 opined: “They may be offering a 36% premium over the March 10 closing price.......but we all know that Underworld has been WELL undervalued for quite some time. 36% is a little light in my estimation.”

Many posters referenced the Canplats takeover, where Goldcorp (TSX: T.G, Stock Forum) and a subsidiary of Newmont Mining (NYSE: NEM, Stock Forum) battled over the small exploration company with Mexican gold properties.

“Based on the Canplats deal, this should really command approx twice the price and that is conservative given the potential of other zones,” wrote figtrader. “I'm surprised management is even contemplating the sale other than to bring out value.”

Northern Tiger Resources (TSX: V.NTR, Stock Forum), which focuses its exploration in the Dawson range as well, shot 83% higher. Just last week, the company announced it had signed a letter of intent to acquire the 3Ace property in southeastern Yukon.

SeventhSon7 suggested that the takeover offer for Underworld was a great thing, because it would funnel cash into a smaller entity, rather than just into larger and better-known producers. “These infusions of cash free up money for smaller investors to move further down the food chain with. I've seen big gains in some smaller gold companies I've got investments in such as Trelawney Mining and Eagle Hill... now if only Northern Tiger can get some good results from 3 Aces and up its market exposure a bit, we can be cashing in with these big gains too. When you have such high gold content as the veins show at 3 Aces, it should not take long to come up with some tangible numbers enticing enough to get the market truly excited.”

Stockhouse Conflict and Disclosure Policy:

Stockhouse publishing Ltd., owners and operators of Stockhouse.com, has established the following rules to ensure that there is no appearance of impropriety on the part of any Stockhouse Editorial writers ("Writers"). The content of Stockhouse Editorial articles (the "Articles") are the opinion of the Writer and any reliance on the content of these articles is at your sole risk. Our Writers are not registered investment advisors. You should not make any kind of investment decision in relation to Articles or stocks discussed in them without obtaining advice from a registered investment advisor.

Facts relied upon by our Writers are generally provided by the subject companies or gathered by our Writers from other public and/or private sources. These facts may be in error and if so, the opinions of our Writers may be materially different.

Writers may own, buy, or sell shares in public companies mentioned in their Articles, but in the Article they must prominently state their ownership position. Thus, a conflict may exist. Writers are not permitted to write Articles that attempt to benefit persons connected to the Writer, such as family or friends, except where disclosure is made in the same way as if the Writer him/herself owns stock.

Writers cannot solicit, accept, or agree to receive anything of value given or paid with the intent of influencing their Articles.

Stockhouse notifies each Writer about these rules, and we rely on the integrity of our Writers to ensure that our rules are followed.

Company Showcase

View Sectors

Today's Feature

View Now

Pacific North West Capital Corp.

Pacific North West Capital Corp. (TSX: PFN; OTCQX: PAWEF; Frankfurt: P7J) is a mineral exploration company focused on the exploration and development of one of Canada's largest primary Platinum Group Metals (PGM) deposits, the River Valley PGM Project located in the Sudbury region of Ontario. The Company is also advancing the Rock & Roll Poly Metallic Project in the Iskut River region of British Columbia. Pacific North West Capital Corp...