Endeavour Mining has entered into an agreement to purchase all of True Gold Mining’s issued and outstanding common shares in a transaction valued at C$226 million. In conjunction with the acquisition, Endeavour Mining announced that La Mancha Holding S.A., its largest shareholder with 30% ownership, intends to exercise an anti-dilution right that will result in an approximate C$82.6 million ($61.5 million) new equity placement in Endeavour Mining.
True Gold has a 90% interest in the Karma gold mine in Burkina Faso, which is nearing production startup with first gold pour anticipated in late March/early April. The acquisition will increase Endeavour Mining’s forecast gold production rate by approximately 110,000-120,000 ounces per year (oz/y) at a low all-in-sustaining cost of approximately $700/oz in years 1 to 5, with a mine life of 8.5 years based on current reserves.
“The production profile and low cost of True Gold’s Karma Mine is a very attractive fit with our West African operating portfolio,” said Neil Woodyer, CEO, Endeavour Mining. “Karma is nearing production, and Endeavour Mining has both the financial strength and an experienced operations team to ensure Karma’s value is maximized during this important stage.
“We intend to see Karma complete its production ramp-up and then commence construction of the Houndé Project,” Woodyer said. “This transaction also demonstrates the strength of Endeavour Mining’s strategic relationship with La Mancha and Naguib Sawiris as our long-term partner with the shared vision of building a leading, Africa-focused gold producer.”