Russian Billionaire Mordashov Exits Gold Race With A Handy Profit

Russian billionaire Alexey Mordashov, who started what became a three-way takeover battle for an Australian goldmining company, has exited with a handy profit.

But no sooner had the man with a fortune which Forbes values at $22.6 billion announced his departure from the race for control of Cardinal Resources than the game re-started with the entry of a fourth bidder.

The latest twists in the fight for Cardinal started early today when Mordashov’s goldmining company, Nordgold, said it would not match the latest offer from China’s Shandong Mining.

Less than a hour later a Dubai-based company, Dongshan Investments, launched a bid that topped all previous offers from Russian, Chinese and Ghanaian suitors for cardinal.

What everyone wants is the undeveloped Namdini gold deposit in northern Ghana.

Mordashov, who made his fortune in steel, kicked the Cardinal ball into play in mid-March with an offer from Nordgold pitched at 33.3c a share, the same price he paid for a 19.9% stake previously held by South Africa’s Goldfields group.

China’s state-controlled Shandong Gold, which had previously forged a close working relationship with Cardinal was unimpressed with Mordashov crashing its party, counter-bidding in June with an 42c offer.

Over the next five months Nordgold and Shandong bid and counter bid, steadily ratcheting up the price for Cardinal which started the year trading on the Australian stock market at 24c before enjoying a bid-fueled rise of 237% to last sales at 81c.

Enter Ghana’s Best

While the Russian and Chinese rivals did most of the bidding they were joined last month by one of Ghana’s biggest companies, Engineers & Planners, which broke an impasse when Nordgold and Shandong locked in offers at the same price of 75c.

Engineers & Planners is one of Ghana’s biggest companies, controlled by Ibrahim Mahama, brother of a former president of the country, John Mahama.

Until earlier today the race for Cardinal had three players. Nordgold, Shandong and Engineers & Planners, but that changed in less than an hour.

The catalyst for the latest move was an announcement two days ago by Shandong that it was lifting its offer for Cardinal to 80c.

That was followed Nordgold accepting the Shandong bid, saying in a statement that the offer was “beyond that which Nordgold feels able to justify”.

Big Profit For Mordashov

Nordgold chief executive, Nikolai Zelenski, said “competitive bidding and a strong Australian dollar had taken Nordgold to a very substantial profit on its investment.”

But that wasn’t the end of the story because Nordgold’s exit was followed by Dongshan’s entry with an offer priced at 90c a share.

Describing itself as an “Emirati-Russian joint venture” Dongshan said its aim was to develop mining projects in a number of countries, especially in Africa.

It seems unlikely that Dongshan’s bid will be the last word in the race for control of Cardinal and the Namdini gold project given the history of bids and counter-bids with Ghana’s player in the game, Engineers & Planners, yet to react to Nordgold’s exit or Dongshan’s surprise entry.

Shandong, however, is confident that it has won the day, announcing that with Nordgold’s acceptance its stake in Cardinal now exceeded 50%.