Fronteer stock tumbles after bid for Aurora

Shares of Fronteer Development Group Inc. lost nearly a third of their value Monday after the company announced an all-stock offer for the 58 per cent of Aurora Energy Resources Inc. it doesn't already own.

Fronteer stock fell 94 cents to $2.19 in trading on the Toronto Stock Exchange. It has ranged between $1.55 and $11.50 in the past year.

Before the market opened Monday, the Vancouver-based company announced it would offer 0.825 of its shares for each Aurora share.

Aurora stock jumped 59 cents to $1.56. It has traded for between 83 cents and $13.96 in the past year.

Fronteer said the offer is a 166 per cent premium for the Aurora shares, based on Friday's closing prices of the two companies' stock.

It said the deal would give it access to Aurora's cash, about $99 million, which combined with Fronteer's $81 million cash would mean Fronteer would not have to sell stock or borrow to explore and develop projects.

Newfoundland-based Aurora said it had not received a formal offer, and will respond when it gets one, expected before Jan. 30.

Aurora is a uranium exploration company with projects in coastal Labrador and the Baker Lake Basin property in Nunavut. Fronteer has gold and copper projects in Nevada and Turkey.