Southwestern Resources Corp. says London-based Hochschild Mining PLC now plans to close its planned merger agreement Thursday with the Vancouver miner worth $22.5-million. The move comes only a few hours after Southwestern said Hochschild had called off the deal.
The Vancouver-based company late Wednesday had said Hochschild cancelled the $22.5-million deal.
That development came after documents were released concerning the sale of Southwestern's troubled Boka project in China. The purchaser, Hong Kong East China Non-Ferrous International Mineral Development Co. Ltd., alleged "certain misrepresentations" related to the sale.
Southwestern released a statement describing the reasons for the cancellation as "without merit" and "unfounded." The company had said it was investigating its options, including continuing talks with Hochschild.
A collapse of the takeover would have represented the second failed merger for Southwestern. In March, Geoinformatics Exploration Inc. terminated an agreement for a merger of equals worth about $11-million with Southwestern Resources. It did not give a reason for the cancellation.
Southwestern had been hit by shareholder lawsuits after problems with exploration results at its Chinese properties, including Boka. Last year, an Ontario judge approved a $15.5-million settlement of an investor class action against the company.
The suit was filed after Southwestern announced in July, 2007, what were initially described as assay errors at Boka, sending the company's stock plunging.
Southwestern then announced in August, 2007, that the mineral resource at the project was significantly smaller than previously reported and it sued former chief executive John Paterson.
Southwestern is now focused on its Peruvian joint venture projects, including the Millo gold-silver project with Yamana Gold Inc. and the 50-per-cent owned Liam gold-silver joint venture with Hochschild.