Ellixor Financial Investments

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Tuesday, June 20, 2006

Pioneer Metals Corp (PSM.TO)



"The Board asks shareholders "not to take action" until it evaluates hostile bid from Novagold."

TORONTO, June 20 (Reuters) - Pioneer Metals Corp. (PSM.TO: Quote, Profile, Research) urged shareholders "not to take any action" until its board evaluates a formal hostile bid from fellow Canadian miner NovaGold Resources Inc. (NG.TO: Quote, Profile, Research).
NovaGold, which wants Pioneer so that it can consolidate activities around its Galore creek project in northwestern British Columbia, launched the bid on Monday, offering 57 Canadian cents (51 cents) for every Pioneer share it does not already own.
Pioneer's Grace gold and copper project lies north of NovaGold's gold, silver and copper project.
NovaGold says it owns a 6 percent stake in Pioneer. NovaGold said it would pay out a maximum of C$34.6 million.
The offer is open until July 25.

Pioneer Metals* (PSM : TSX : $0.59)Net Change: 0.16, % Change: 37.21%, Volume: 1,127,079NovaGold Resources (NG : TSX : $12.40)Net Change: -0.55, % Change: -4.25%, Volume: 270,651If you can't beat 'em, buy 'em. NovaGold continues to strengthen its position in the Galore Creek, BC area. Yesterday, Novagold launched a $0.57 per share, all-cash offer for Pioneer Metals. Pioneer owns the Grace property, which is adjacent to Galore Creek and is the subject of litigation. NovaGold also recently agreed to acquire Coast Mountain Power (MW) for $2.20 per share in a move designed to create development synergies in northwest BC. In addition to the Galore Creek area, where a feasibility study is underway and NovaGold hopes to begin mine construction next year, the company continues to advance its Rock Creek and Big Hurrah projects in the Nome, Alaska area towards construction while continuing to develop the Donlin Creek and Ambler projects with partners. Pioneer traded above the offer price throughout the day yesterday, indicating that investors suspect that a higher bid will be required to complete a deal.

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