Primero Mining Corp. officials have announced the acquisition of all Brigus Gold Corp. outstanding shares to create a diversified, Americas-based mid-tier gold producer; Canada’s Goldcorp Inc., which holds 27% of Primero shares, is backing the $220 million implied transaction.
The new company, added officials, will hold Brigus interests in Saskatchewan’s Goldfields project and its Mexico-based Ixhuatán and Huizopa projects. The new 100% Primero-owned subsidiary will enjoy enhanced capitalization of $720 million.
These mines can produce up to 270,000 gold equivalent oz in 2014 at below-average cash costs while potentially increasing to 400,000 oz by 2017, added officials. On completion, Brigus shareholders will possess a 90.1% interest in the new company, while Primero will hold the remainder.
“This acquisition is immediately accretive to our production and cash flow,” said Primero CEO Joseph F. Conway, a former CEO of Canada’s IAMGOLD. “It also diversifies Primero geographically.”
Brigus CEO Wade Dawe sounded similar enthusiasm. “The combined company will also benefit from improved market liquidity,” he said, “and Primero's proven management team with a demonstrated track record of successfully growing mining companies.”
Primero Mining Corp. is a Canadian precious metals producer that owns 100% of the San Dimas gold-silver mine and 69.2% of the Cerro del Gallo gold-silver-copper development project in Mexico; the company seeks to diversify across the Americas.
Brigus Gold Corp. is a growing producer and explorer that operates the wholly-owned Black Fox mine and mill in the Timmins Gold District of Ontario. Brigus also owns the Goldfields project near Uranium City in Saskatchewan, Canada, which hosts the Box and Athona gold deposits. In the Dominican Republic, Brigus has agreed to sell its remaining interests in three exploration projects; in Mexico, it owns the Ixhuatan Project in the state of Chiapas.