Exeter Resource: Rising Amid Takeover Rumors

Includes: ABX, KGC, NEM, XRA
by: Streetwise Blog

By Andrew Willis

The hedge fund community is abuzz over a possible takeover at Exeter Resource (NYSEMKT:XRA) in the wake of what appears to be indiscreet comments from the gold miner’s chief geologist.

In an interview carried around the world by Reuters, Exeter’s Glen Van Kerkvoort is quoted as saying that the company has signed confidentiality agreements with potential acquirers that include “Newmont (NYSE:NEM), Barrick (NYSE:ABX), Kinross (NYSE:KGC) and a couple of Chinese groups.” The Exeter executive said a takeover could come within the next year.

Shares in Exeter jumped on the news, with trading at three times the average volume, though as BMO Nesbitt Burns analyst John Hayes said on Tuesday in a report: “When we contacted the company, management indicated to us the company had not, in fact, identified any companies with whom they may have signed confidentiality agreements.”

But Mr. Hayes went on to say: “If the Reuters report were true, it would come as no surprise to us that Exeter has entered into confidentiality agreements. We believe confidentiality agreements to be of wide use in the industry, particularly when it comes to projects that have sizable resources.”

Vancouver-based Exeter sports a $570 million market cap, and the stock has more than doubled in the past year.