AngloGold Ashanti submitted a non-binding proposal to Corvus Gold this week under which it would acquire for cash all outstanding common shares of Corvus which the company does not already own. AngloGold Ashanti currently holds a 19.5% interest in Corvus. Corvus is listed on the TSX and AngloGold Ashanti has offered C$4 per share, a 55% premium, which values the transaction at approximately $370 million
Corvus owns North Bullfrog, Mother Lode, and other exploration assets located in southern Nevada’s Beatty District, close to or contiguous with, AngloGold Ashanti’s exploration assets of Silicon, Transvaal, and Rhyolite.
“The proposal is fully aligned to our strategy of growing ore reserves, building low-cost production, and generating sustainable returns,” said Christine Ramon, AngloGold Ashanti’s Interim CEO. “We have a unique opportunity to combine Corvus’ assets with our own – in the world’s top-ranked mining jurisdiction – to create a meaningful new production base for AngloGold Ashanti in the medium and longer-term.”
Consolidation of the Beatty District has the potential for significant synergies from economies of scale and integrated infrastructure including processing facilities. The combined asset base allows for streamlined engagement with federal, state, and local stakeholders to advance and achieve shared sustainability goals and other district benefits, such as opportunities to design projects incorporating renewable energy, as well as develop conservation and other local projects in conjunction with the Beatty community.
AngloGold Ashanti does not currently operate mines in the U.S., but it operated the Cripple Creek & Victor gold mine in Colorado from acquisition in 1999 through to its sale to Newmont in 2015. It also operated the Jerritt Canyon gold mine in Nevada from acquisition in 1999 through to its sale in 2003. The company is still conducting closure monitoring activities at the Big Springs mine in Nevada that was closed in 1994. It’s North American headquarters is in Denver, Colorado, from where it manages its U.S. business interests as well as a global greenfield exploration portfolio, including its portfolio in the United States.
The proposal follows the announcement by Corvus during May that it had entered into a $20 million unsecured loan agreement with AngloGold Ashanti North America Inc. The load agreement granted AngloGold Ashanti an initial exclusivity period of 90 days, during which the company was allowed to conduct a detailed due diligence exercise on Corvus and its key assets. Under the terms of the loan agreement, the initial exclusivity period would be extended by a further 30 days in the event AngloGold Ashanti submits a letter of intent or proposal.