Takeover talks between gold miners Endeavour and Centamin hit a snag

Egypt-focused gold miner Centamin (LON:CEY) (TSX:CEE) has accused Canada’s Endeavour Mining (TSX:EDV) of making it difficult for the company to assess the value of a potential business combination unless it agrees to extending a firm offer deadline.

The London-listed gold miner said that since Endeavour was not engaging in a “proper manner” it would not ask UK regulators for an extension to a Dec. 31 bid deadline.

A merger would create a mid-tier gold miner with a market value of almost $4bn and annual production of more than 1.2 million ounces.

Earlier in the week, the gold miners seemed to be moving forward on a possible merger as they agreed to explore the feasibility of such kind of deal.

Centamin, which called the Toronto-listed miner’s approach an “unsolicited offer”, had rejected the potential suitor’s original $1.9 billion (£1.5 billion) all-stock takeover bid, saying it did not offer enough value to its shareholders.

It also noted at the time that business combination would expose the company to the deteriorating security situation in Burkina Faso, as almost half of Endeavour’s gold resources are located in the west African country.

A deal would hand the Canadian company Centamin’s Sukari gold mine in Egypt — a 500,000-ounce-a-year operation and one of the world’s top ten deposits of the yellow metal.

Sukari, which began operations in January 2010 and is Egypt’s largest gold mine, comprises a large open pit and an underground portion. Last year, the company worked on operational improvements on both sections, but they took longer than planned to materialize, which affected output.

A successful merger would create a mid-tier gold company with a market value of almost $4 billion and annual output of more than 1.2 million ounces.