Leagold Mining Corporation announces that it intends to make an offer to acquire all of the issued and outstanding shares of Brio Gold Inc.
The deal is worth $264m.
Leagold CEO Neil Woodyer stated:
“Leagold’s growth strategy in Latin America started with the acquisition of the Los Filos mine in Mexico in April 2017 from Goldcorp, and we have a clear objective of building Leagold into a leading, intermediate gold producer in Latin America. This strategy focuses on acquiring operating gold mines and projects nearing construction, post-acquisition asset optimization, and unlocking value.
“The combination with Brio represents a unique opportunity to acquire a portfolio of producing assets with a meaningful growth profile. The all-stock offer results in Brio shareholders owning approximately 42% of the combined company. The combined operations are expected to produce approximately 450,000 ounces in 2018, with the potential for growth to over 700,000 ounces in 2020 at all-in sustaining costs in the mid-$8001s. In addition, this combination reduces overall business risk by having four operating mines in two jurisdictions. We regard both Mexico and Brazil as jurisdictions with considerable future potential for Leagold.
“Leagold is offering a 57% premium to Brio shareholders, which provides full value and is justified based on the currently discounted value of Brio’s assets and the expected savings from eliminating most of their corporate costs. We have support from Brio’s controlling shareholder Yamana, with 53.6% of Brio, and several large Leagold shareholders who in the aggregate hold approximately 57% of the company.”