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European Goldfields Seeks To Keep Qatar Option, Reuters Reports

European Goldfields Limited (EGU.TO), which has agreed a C$2.5 billion takeover by Eldorado Gold (ELD.TO), is hoping to keep an investment deal with Qatar's sovereign wealth fund as a fall back option, Reuters reports.

Qatar Holdings agreed in October to provide a US$600 million project financing loan to European Goldfields, which has development stage assets in Greece and Romania, in its first investment in a gold miner. It also provided a $150 million loan note and a related warrant issue, and became a major shareholder, with a 9.9 percent stake.

Eldorado's strong balance sheet means European Goldfields is unlikely to need the cash from Qatar if the takeover goes through -- but it does need two-thirds of shareholders to back the deal when they vote in February, notes Reuters.

European Goldfields' chief financial officer Tim Morgan-Wynne said voting on the Qatari transaction won't happen until after shareholders have been able to vote on the Eldorado deal.

Qatar bought stock at an average of C$10 -- below the C$13.08 per share value of the Eldorado offer.

European Goldfields shareholders had been due to vote this week on the Qatar financing. That ballot will be postponed until shareholders vote in mid February on the proposed takeover.

European Goldfields shares are currently trading at $11.64, down 1.69%, while Eldorado Gold Corp shares are down 10.40%, at $13.79.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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