Gold News | Kinbaruri Gold Investment Deal with Glen Eagle Cancelled

Gold News

The proposed investment deal between Kinbauri Gold Corp and Gold Eagle Resources has been halted, as Kinbauri Gold said they didn't feel comfortable with the funding arrangements by Glen Eagle, and believed there wasn't enough funding available to make the deal happen.

Glen Eagle had in April offered to invest C$32 million in Kinbauri for a 45 percent stake in Kinbauri Espana unit -- which holds interests in the El Valle/Carles gold and copper project in northwestern Spain.

Separately, Glen Eagle said it believes that Kinbauri's termination is a breach of their deal and is considering its options.

Kinbauri, which is also the target of a takeover bid from Toronto-based Orvana Minerals Corp (ORV.TO), said it has decided to allow the matter to be determined in a court at the same time as the application brought by its shareholder Jaguar Financial Corp, scheduled to be heard on June 17.

Last month, Jaguar Financial, which owns 9 percent of Kinbauri, had approached the court, after Kinbauri rejected Orvana's offer of 55 Canadian cents a share as its deal with Glen Eagle was on the verge of completion.

In a statement on Friday, Kinbauri said a special committee continues to evaluate the takeover bid from Orvana Minerals, consider other alternatives and will make a recommendation to the board in the near future.

Gold News

Gold Bullion Dealers Say There's Shortage in Many Popular Bullion Products

Demand for gold bullion has resulted in a shortage in a number of popular products for bullion dealers. The shortage, which has been rumored for about a month, has now become a reality, although it's hopeful that it's temporary.

The shortage has had a significant impact on dealers, as some now have a lengthening waiting list. Some dealers who have policies of not taking orders for a product unless they have physical possession or guaranteed delivery from reliable sources of the metal have been hit especially hard.

To get an idea of the demand, most dealers have had about five times the usual orders in the last two weeks because of concerns over the faltering U.S. economy.

Some of the gold products not available at this time are the Pamp 1-ounce and 10-ounce gold bars; 5-9s special edition Maple Leaf; 1-ounce gold Eagles; and gold Buffalo coins. The U.S. mint is no longer taking orders for the Buffalo coin at this time. Gold Eagles are still being produced, but at such a slow rate that most retailers can't get hold of them.