CENTRAL SOUTH AMERICA

Batista's AUX moves on juniors in California gold district in Colombia

A billionaire's gold company goes after two juniors next door to its gold projects in the California gold district.

HALIFAX, NS (MINEWEB) - 

It was a matter of speculation earlier this week but now it is a fact. Billionaire Eike Batista's private gold company, AUX, wants to consolidate its hold on precious metals projects in the California gold district in Colombia. Today it proposed not one but two takeovers of juniors operating in the area: Galway Resources and Calvista Gold.

The move on the two juniors on the same day answers a question posed in these pages earlier this week about whether the time for AUX to consolidate in Colombia was at hand.

In Galway and Calvista AUX gets a string of projects in the California district including Calvista's 450,000 ounces gold indicated, and about as much again in inferred resources, and Galway's 424,000 ounces gold indicated and 666,000 ounces gold inferred, all within two kilometres of AUX's larger La Bodega and La Mascota projects.

Calvista's chief resources are in the Callejon Blanco zone about a kilometre southwest of AUX tenements while Galway's California project lies sandwiched between Calvista and AUX concessions. As noted earlier this week that sandwich includes wedges of tenements cutting into key AUX land positions and resources, a fact which has led analysts to include a takeover was inevitable.

No surprise, shares in two other juniors with land packages in the area, Eco Oro (formerly Greystar) and CB Gold, also experienced strong price movement on Friday, both up about 10 percent as of presstime.

As for details about the takeover at hand: a quarter of Calvista shareholders have entered into lock-up agreements with AUX. The junior said the AUX offer represented a 100-percent premium to its 10-day volume weighted average shareprice. As for Galway, it said it was getting a 47 percent premium to its 20-day average. Meanwhile Galway, as part of the deal, will spin out its other projects into separate gold and tungsten companies.