(Reuters) - Shares of Canadian gold producer La Mancha Resources Inc LMA.TO rose as much as 31 percent after the company said it is putting itself up for sale and looking for prospective buyers.
La Mancha, which has a market capitalization of C$465.25 million according to Thomson Reuters data, said it had already received several verbal expressions of interest.
French nuclear reactor builder Areva AREVA.PA holds a 63 percent stake in the company through a subsidiary.
“We think it’s an excellent asset with long-term growth potential in Sudan,” said analyst Eric Allison of Casimir Capital.
La Mancha operates two producing gold mines in Africa and one in Australia. It had forecast gold production of up to 130,000 ounces this year.
“The company’s properties will need a lot of capital to develop and Areva is probably not ready for that sort of capital expenditure and is looking to monetize its asset,” Allison said.
The company said it retained BMO Nesbitt Burns Inc in Canada as financial advisor and Fasken Martineau as Canadian legal advisor for the sale process.
Shares of the company were trading up 21 percent at C$3.95 on Thursday on the Toronto Stock Exchange.
Reporting by Maneesha Tiwari in Bangalore; Editing by Roshni Menon