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TORONTO – Across the mining world, one question is on everyone’s lips this week: Who is China Gold Stone Mining Development Ltd.?
The mystery began with a press release issued Tuesday morning. The statement claimed a company called China Gold Stone has launched a $780-million hostile offer for Toronto-listed miner Allied Nevada Gold Corp. The press release was retracted hours later, with the sender saying that it was issued “in error and without the advice of counsel.”
Investors and analysts had never heard of China Gold Stone, and this debacle made them take a closer look at it. Before long, they were questioning if the company exists.
The press release calls China Gold Stone a “large-scale mining company” that owns three gold mines in China worth roughly US$15-billion. It also said China Gold Stone is registered in Hong Kong and that it is working with China National Gold Corp. (China’s largest producer) to invest in global mining markets.
While there are an enormous number of little-known mining companies strewn across China, any company with such enormous mineral wealth should be well known.
“I emailed our Chinese precious metals analyst who covers the public companies out of China, and he’s never heard of them,” said Michael Gray, an analyst at Macquarie Capital Markets.
The same goes for Allied Nevada. The miner said it cannot find any substantive information about China Gold Stone, and said that no offer for its shares has commenced. It also pointed out that the alleged offer is set to expire in just two weeks, which is not allowed under U.S. and Canadian securities laws.
“We have no other information,” said Bob Buchan, Allied Nevada’s executive chairman and the founder of Kinross Gold Corp.
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