G Mining Ventures Corp. (GMIN) signed an agreement with Reunion Gold Corp. to combine the two companies in an all-share transaction valued at $640 million. GMIN will acquire RGD’s flagship Oko West Project located in Guyana, within the Guiana Shield region, one of the most attractive mining jurisdictions in South America. Oko West has emerged as a significant gold discovery over the last few years, with excellent potential to become a top-tier deposit.
GMIN said it plans to move Oko West quickly through technical studies to a construction decision, leveraging the considerable amount of exploration, development, and permitting work that has already been completed by RGD, supported by the expected free cash flow from the Tocantinzinho gold project, which is trending on schedule and on budget for commercial production in the second half of 2024.
“Oko West has all the key attributes GMIN is looking for in its next leg of growth,” said Louis-Pierre Gignac, president, CEO, and director of GMIN. “We are well-positioned to accelerate value creation at Oko West leveraging our unique expertise in building and operating mines on schedule and on budget in the Guiana Shield, deep knowledge of and network in the region, and more than $480 million anticipated near-term free cash flow from Tocantinzinho. The acquisition of Oko West is the second step towards our vision of becoming a leading intermediate gold producer.”
Under the terms of the Agreement, GMIN and RGD shareholders will receive common shares of a newly formed company (the New GMIN) equivalent to RGD shareholders being issued 0.285 GMIN common shares for each RGD common share. In addition, RGD shareholders will receive common shares in a newly created gold explorer (SpinCo) that will hold all of RGD’s assets other than Oko West. GMIN has agreed to fund SpinCo with $15 million.
RGD shareholders will receive an estimated consideration of $0.65 per RGD common share, which places an equity value of C$875 million ($640 million) on the transaction. Upon completion of the transaction, existing GMIN and RGD shareholders will own approximately 57% and 43% of the combined company respectively.
