Bema drops Arizona Star bid

Vancouver-based Bema Gold (TSX, Amex: BGO, AIM: BAU) had dropped its plan to launch an offer to purchase shares of Arizona Star Resource (TSX-V: AZS), the former said in a statement. The company has also decided not to renew its management contract with Arizona Star and Roger Richer, Bema's last representative on the Arizona Star board, has resigned, said Bema. "Bema has reached these decisions due to current market conditions and the company's desire to focus on its priority growth projects, the Kupol project [in Russia] and Refugio mine [in Chile]," the statement said. In addition, Bema said it had concerns about being a non-controlling shareholder of Arizona Star, "given the make up and recent actions" of the new board and management. Bema IR spokesperson Ian MacLean was not immediately available to provide details of Bema's position. However, Bema has fallen out with Arizona Star's largest shareholder Pan Atlantic Bank and Trust, which hold about 30% of the company, over timing of the development schedule of the Cerro Casale gold-copper project in Chile, 24%-owned by Bema and 25% by Arizona Star. Bema announced on December 20 its intention to launch an offer to increase its current 5% stake in Arizona Star. Since then Bema's share price has fallen from Cdn$3.12 to Friday's opening of Cdn$2.12. Bema previously said it wanted to increase its stake in Arizona Star to gain extra exposure to Cerro Casale. Canada's Placer Dome (NYSE: PDG) has 51% of the project and has until the end of this year to arrange US$1.3bn of total Cerro Casale capex of US$1.65bn.