Battle Between Two Canadian Mining Companies Looking to Acquire Coastal Gold Corp. Becomes Heated

The Financial Post reported that the fight between two Canadian mining companies to acquire Coastal Gold Corp. (TSXV:COD) is heating up. Keith Neumeyer’s First Mining Finance Corp. (TSXV:FF) has offered $0.06 per share of $10.2 million for the company, while Sulliden Mining Capital’s (TSX:SMC), owned by Stan Bharti, rival offer comes in at about $0.023.

As quoted in the market news:

Given that First Mining’s offer is more than double Sulliden’s offer, one might assume that Neumeyer is convinced he will win. But that isn’t the case. Coastal’s board is currently endorsing the Sulliden bid, and Neumeyer would be surprised if that changes.

Neumeyer, who previously founded First Quantum Minerals Ltd. and First Majestic Silver Corp., thinks the problem here is inter-relationships between Bharti’s companies. Both Sulliden and Coastal are under the umbrella of Forbes & Manhattan (F&M), Bharti’s conglomerate of resource companies.

“There’s incestuous behavior between all three groups,” he said.

Neumeyer pointed out that every director of Coastal has ties to F&M, as does its chief financial officer and corporate secretary. Some of them even work out of F&M offices and have F&M on their business cards, he claimed. He believes Bharti and his people are determined to put Coastal and Sulliden together, even if it means rejecting a much higher bid. He noted that Coastal has a good project but needs cash, while Sulliden has cash.

Bharti, a famous junior mining financier, has come under fire several times in the last few years from shareholders who claimed he is not acting in their interests. He has been targeted in multiple proxy fights, including one last year from Meson Capital Partners LLC.

Click here to read the full Financial Post report.