Timmins Gold Corp. will acquire all of the issued and outstanding common shares of Newstrike Capital in a transaction valued at C$140 million ($112.5 million). The combination of Timmins Gold and Newstrike will create an emerging intermediate gold producer with a set of production and development assets all based in Mexico. With the San Francisco mine providing a solid base of operations, the combined company will have a leading growth profile driven by what Timmins Gold believes are two economically robust development projects with manageable capital requirements, Newstrike’s Ana Paula gold project and Timmins Gold’s Caballo Blanco gold project. The boards of directors of both companies have each unanimously approved the terms of the agreement.
“The combination of Timmins Gold and Newstrike will immediately position Timmins Gold as an emerging intermediate gold company supported by current production and a very attractive pipeline of development projects,” said Bruce Bragagnolo, CEO of Timmins Gold.
“The assets and projects in both companies are highly complementary and we are excited about the many opportunities ahead for us,” said Arturo Bonillas, president of Timmins Gold. “This transaction provides significant benefits to Newstrike shareholders and is accretive to Timmins Gold on key financial and operating metrics.”
Newstrike shareholders will receive 0.9 of a Timmins Gold common share and C$0.0001 in cash for each Newstrike common share, representing the equivalent of C$1.15 per Newstrike share and a premium of 20% based on the closing prices of the Timmins Gold shares on the Toronto Stock Exchange and the Newstrike shares on the TSX Venture Exchange on February 13.