eResearch | Mining “Merger Monday” is back with three mining deals announced today:
- SSR Mining and Alacer Gold announce a “Merger of Equals” to create a diversified gold producer.
- Gran Colombia Gold proposes to merge with Gold X and Guyana Goldfields to create a Latin American-focused intermediate gold producer.
- Adriatic Metals to acquire Tethyan Resource Corp, creating a larger polymetallic explorer and developer in the Balkans.
1) SSR Mining (TSX: SSRM ; NASDAQ: SSRM) and Alacer Gold (TSX: ASR ; ASX: AQG) Merger
SSR Mining and Alacer Gold announce a “Merger of Equals” to create a diversified gold producer. Under the proposed transaction:
- Alacer shareholders will receive 0.3246 SSR Mining shares for each Alacer share held, implying a valuation of C$8.19 per Alacer share.
- The market capitalization of the new company would be approximately $4.0 billion.
- The merger creates a company with a diversified portfolio of operating mines and exploration projects, including SSR’s mines in Nevada, Saskatchewan and Argentina, and Alacer’s mine in Turkey.
The transaction is expected to close after special shareholder meetings of both companies that are planned for July 2020.
2) Gran Colombia Gold (TSX: GCM ; OTCQX: TPRFF) Merger with Gold X (TSXV: GLDX ; OTCQX: SSPXF) and Guyana Goldfields (TSX: GUY)
Gran Colombia Gold proposes to merge with Gold X and Guyana Goldfields to create a Latin American-focused intermediate gold producer.
Gran Colombia and Gold X believe the transaction will provide synergies from the Guyana Goldfields and Gold X projects in Guyana that could unlock savings of approximately US$200 million based on the latest technical reports.
Gran Colombia/Gold X/Guyana Goldfields Transaction Highlights:
- Gran Colombia proposes to acquire all of the issued and outstanding shares of Guyana Goldfields at a share exchange ratio of 0.142 Gran Colombia shares for each Guyana Goldfields share, implying a value of C$0.90.
- The C$0.90 share price would be approximately a 50% premium to the C$0.60 per share offered by Silvercorp (see below).
- Gran Colombia would also provide Guyana Goldfields with a US$15 million loan earmarked for ongoing operations and general corporate purposes.
- Concurrently, Gran Colombia plans to acquire the remaining 81% of the issued and outstanding shares of Gold X that it does not already own at a share exchange ratio of 0.500 Gran Colombia shares for each Gold X share, implying a value of C$3.17.
Previous Silvercorp/Guyana Goldfields Deal:
This new transaction would shelve Silvercorp Metals (TSX: SVM , NYSE: SVM) planned acquisition of Guyana Goldfields that was announced on April 27. Under the terms of the proposed previous transaction:
- Silvercorp would acquire all of the issued and outstanding shares of Guyana Goldfields for C$0.60 in cash or 0.1195 of a Silvercorp common share (valued at C$0.60), subject to a maximum cash consideration of C$33.2million.
- This deal would value the equity portion of the deal at approximately C$105 million.
3) Adriatic (ASX: ADT ; LON: ADT1) to acquire Tethyan (TSXV: TETH)
Adriatic to acquire Tethyan to create a larger polymetallic explorer and developer in the Balkans. Transaction details:
- Each Tethyan shareholder would receive 0.166 Adriatic shares for each Tethyan share held, implying a price of C$0.184 per share.
- Tethyan shareholders would end up owning approximately 6.9% of Adriatic.
- Adriatic would also provide Tethyan with a €$1.3 million loan to enable Tethyan to close a previously announced acquisition and for drilling.
Adriatic is an Australian precious and base metals explorer and developer with 100% interest in the Vares Project in Bosnia & Herzegovina. Tethyan is a Canadian-based precious and base metals exploration company focused on the Tethyan Metallogenic Belt in Eastern Europe, mainly Serbia.
The companies believe that there are exploration synergies between their operations in Bosnia & Serbia and additional potential for operational synergies if the projects move into production.
The transaction is expected to close by the end of August 2020.
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