Eldorado Gold Corp. has entered into a definitive agreement with Integra Gold Corp. to acquire all of the issued and outstanding common shares of Integra that it does not currently own.
Under the arrangement, each shareholder of Integra (excluding Eldorado) will be entitled to receive $1.21 per share, to be satisfied by delivery to the holder of one of the following, at the election of the holder: 0.24250 of an Eldorado share, C$1.21250 in cash, or 0.18188 of an Eldorado share and C$0.30313 in cash. Eldorado will issue an aggregate maximum of 77 million shares and pay an aggregate maximum of C$129 million in cash, equal to approximately 25% of the total consideration. The total transaction value is approximately C$590 million, inclusive of shares held by Eldorado.
Upon completion of the transaction, current Eldorado and Integra shareholders would hold approximately 90% and 10% of the combined company, respectively.
Integra’s principal asset is the Lamaque project near Val-d’Or, Quebec. Lamaque hosts an indicated resource of 5.1 million metric tons (mt) at a grade of 9.13 grams/t gold and an inferred resource of 3.5 million mt at a grade of 7.94 g/t gold (5 g/t gold cut-off). A preliminary economic assessment was completed in February that envisions a high-grade underground operation producing 123,000 ounces of gold per year (oz/y) at all-in sustaining costs of US$634 per ounce over 10 years. Integra is currently in the process of advancing underground ramp development to facilitate underground exploration and completion of a bulk sample.
George Burns, president and chief executive officer of Eldorado Gold, said, “The company has been following Integra’s progress at Lamaque over the last 18 months and commend their team for the accomplishments to date. From previous experience of building and operating gold mines in Canada, I am excited about Eldorado’s entry into the Eastern Abitibi region of Canada. With our current balance sheet strength post the sale of our Chinese assets, this acquisition represents a use of the proceeds complementing our existing portfolio of high quality, low cost assets.”
The transaction requires approval by shareholders and is subject to the receipt of certain regulatory, court and stock exchange approvals, and other closing conditions customary in transactions of this nature. It is anticipated that the meeting of Integra shareholders will be held in July.
Integra has agreed to pay a termination fee of approximately C$18 million to Eldorado. Each company’s board of directors approved the terms of the proposed arrangement and the Integra Board of Directors unanimously recommended that its shareholders vote in favor of the transaction. Following completion of the transaction, Eldorado will own 100% of the issued and outstanding common shares of Integra.
