Allied Nevada Gold Corp.
, Stock Forum
) queried the credibility of a takeover offer that caused the shares of the U.S. gold mining company to rally on Tuesday.
Allied Nevada warned investors to review the hastily withdrawn release with caution
A release distributed early Tuesday said a company called China Gold Stone Mining Development had commenced a cash tender offer for all the outstanding shares of Allied Nevada at $7.50 a share.
Hours later, another release retracted the announcement, saying it had been “issued in error and without the advice of counsel.”
Trading in Allied Nevada was halted on Tuesday morning after the stock rose 7% to $5.02, leaving the company with a market cap of $521.8 million, based on 103.9 million shares outstanding. The 52-week range is $28.25 and $3.20.
Allied Nevada issued a release Tuesday
saying that together with its advisors, Allied Nevada has not been able to find any substantive published information on China Gold Stone and cannot substantiate the credibility of the proposal.
“There is no public information available to indicate that China Gold Stone has the financial resources to complete the proposed transaction,’’ Allied Nevada said, adding that no tender offer has been commenced. (with files from Reuters News Service).
Allied Nevada operates its wholly-owned Hycroft gold mine near Winnemucca, Nevada. Last week the company said it produced 190,831 ounces of gold and 882,225 ounces of silver in 2012. That marked an increase of 39% and 11% respectively from 2012 production levels.
Gold and silver sales in 2014 are expected to increase to approximately 230,000-250,000 ounces of gold and 1.7 million-2.0 million ounces of silver, the company said.