(ShareCast News) - SolGold has rejected an offer from BHP Billiton to buy 10% of the compay for $30m (£24.2m) as well as a $275m earn-in payment for most of the AIM-listed company's share in its Cascabel project in Ecuador.BHP's proposal, which would replace the previously announced $33m financing agreed with Maxit Capital and Newcrest Mining, would include a BHP director being added to the board and require a 60-day period for it to complete due diligence if the deal is accepted.SolGold's Australia-based board, including chief executive Nick Mather who owns more than 11% of the shares, said it felt the deal was "not the best interests of SolGold and its shareholders and it is not a superior proposal" in comparison to the Maxit and Newcrest deal, partly as the BHP proposal is "highly conditional, non-binding and subject to due diligence".It added: "Most importantly, the board considers that when all of the elements of the BHP proposal are taken into account, the BHP proposal implies an attributable price paid to SolGold and in respect of the Cascabel Project that is at a significant discount to the current trading price of SolGold and the $33m financing with Maxit and Newcrest."Mather added that the Maxit-Newcrest option was preferred as it left SolGold in control of Cascabel."There is considerable upside in the additional 13 targets as well as the existing and growing Alpala deposit. We have developed the exploration models and strategies to an advanced level, we are well funded and we are intent on delivering and retaining that upside substantially, for all SolGold shareholders."Analysts at SP Angel said the interest of a second major mining company in the Cascabel project drew attention to the quality of the project and underlined the potential of the wider licence area."The BHP proposal would give SolGold less money albeit at a better price. However, the conditions attached to the BHP offer are such that BHP could effectively take control of the project for spending $275m, though this is a huge financial commitment," they said. "We await BHP Billiton's response to this initial rebuttal with interest and reckon there is a good chance BHP might return with an improved proposal."Shares in SolGold were up more than 16% to 19.31p by later afternoon on Monday.
Last checked at 
