Polo Resources says private equity offer “significantly undervalues” assets
26 January 2009
Private equity firm Denham Capital Management has made an offer for AIM listed mining concern Polo Resources. Polo described the bid as highly conditional and claimed it significantly undervalued the company’s assets.
Nevertheless, Polo’s deputy chairman, Neil Herbert, said he was pleased with the interest shown in the company’s assets and said he believed it illustrated the potential resource and significant value available to the company, as well as the strategic importance of its Mongolian licenses.
Polo stressed that the offer – made by Denham Commodity Partners Fund V LP – may or may not lead to a cash offer being made for the company. It said it was continuing to evaluate potential strategic partnerships for its Mongolian mineral interests to expedite the funding and development of those assets.
Herbert added: “This approach does not appropriately reflect the value of our assets, particularly considering our strong working capital position of approximately US$78 million and equity stakes in Caledon Resources plc (26.3%) and GCM Resources plc (29.8%). Caledon has announced that it is having discussions which may lead to an offer for the Company and GCM is working with the newly elected government of Bangladesh to move the Phulbari Coal Project forward, both of which would greatly enhance their value.”
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