Mergers and acquisitions are ramping up in Canada with gold and copper miner Aura Minerals (TSX:ORA) and gold producer Minera Alamos (TSX-V:MAI) both striking deals to acquire fellow Canadian companies.
Aura Minerals has struck a deal to fully acquire Vancouver-based gold explorer Bluestone Resources (TSX-V:BSR) for C$0.50 ($0.55) per share, via a combination of cash and Aura shares.
The purchase price represents a 40% premium to the volume weighted average price of Bluestone shares on the TSX Venture Exchange for the 25 days ending 24 October 2024.
Under the deal, Bluestone shareholders have the option of taking a cash payment of C$0.287 or 0.0179 of an Aura common share, or a combination of both.
The deal gives Aura control of Bluestone’s Cerro Blanco Gold Project in Guatemala and adjacent Mita Geothermal Project.
Aura CEO Rodrigo Barbosa says Cerro Blanco is a “world-class” deposit but has faced both social and institutional hurdles.
“We are confident that, along the next few years, by integrating it with Aura’s 360 vision, we can refine our strategic approach to make Cerro Blanco another flagship project that exemplifies the utmost respect for social and environmental responsibilities while delivering value to all stakeholders,” Barbosa says.
Bluestone shareholders will also receive a contingent value right for a potential cash payment of up to C$0.2120 for each Bluestone share, payable in three equal annual installments once the Cerro Blanco Project reaches commercial production.
Following a strategic review, Bluestone has determined the acquisition is the best way forward for the company, according to CEO Peter Hemstead.
“After a fulsome strategic review process, the acquisition by Aura provides the best outcome for Bluestone shareholders and to further advance the Cerro Blanco Gold Project and Mita Geothermal Project,” he says.
“The transaction presents shareholders with a choice to maintain exposure to Cerro Blanco through a proven Latin America mine developer and producer with a strong balance sheet or elect cash.
“Aura is a well established Latin American producer with a track record of development and has the financial capacity to advance and unlock potential value from Cerro Blanco.”
The transaction has been unanimously approved by the boards of both companies, but is still subject to shareholder, court, TSX Venture Exchange and regulatory approvals.
Meanwhile, Minera Alamos has entered into a definitive all-scrip agreement to acquire all of the shares of Toronto-headquartered Sabre Gold Mines (TSX:SGLD).
Each Sabre Gold shareholder will receive 0.693 of a Minera Alamos share in exchange for each Sabre Gold share held.
Minera Alamos has also negotiated with certain creditors to eliminate about C$9.4 million of existing debt in exchange for Sabre Gold shares at a 15% discount to face value of the debt.
These debt settlement arrangements will clear all of Sabre Gold’s existing long-term debt obligations as well as some of its short-term debt prior to the acquisition.
The deal adds Sabre Gold’s flagship past producing Copperstone Mine in La Paz County, Arizona to Minera Alamos’ portfolio, which provides visibility to a further 150,000 ounces of annual gold production in North America.
The Copperstone Mine produced 514,000 ounces of gold from 1987 to 1993.
The project will boost Minera Alamos’ total gold resource inventory by 35% to almost 1.9 million ounces and increase measured and indicated resources by roughly 60%.
Minera Alamos CEO Darren Koningen says the Copperstone project has significant infrastructure and permits in place which will allow the company’s technical group to quickly advance the project into production.
“We have already initiated our engineering efforts aimed at fast-tracking Copperstone’s development and are working to expand our technical team under the guidance of Kevin Small, a director with Minera,” Koningen says.
“Recently, as President of Sprott’s Jerritt Canyon underground operations in Nevada, Kevin led the project turnaround prior to its sale and he has extensive underground mining experience both in Canada and the southwestern US.
“We are also in discussions with lenders in connection with potentially expanding existing finance facilities to accommodate the development of both Copperstone as well as our Cerro de Oro project in Mexico, which is awaiting permit approvals.”
On completion of the transaction, existing Minera Alamos and Sabre Gold shareholders will own about 86% and 14% of Minera Alamos, respectively.
Write to Angela East at Mining.com.au
Images: Bluestone Resources & Sabre Gold
