Why is Eldorado gold purchasing Integra Gold Corporation?
Eldorado Gold has announced that it has “entered a definitive agreement” with Integra Gold Corp to acquire all of the issued and outstanding common shares of Integra.
Details of the acquisition have revealed that current Eldorado and Integra shareholders would hold approximately 90% and 10% of the combined Company.
What this means is that the maximum number of shares issuable by Eldorado under the arrangement will be about 77 million and the total deal value is about $590 million, inclusive of Integra shares held by Eldorado.
What will Eldorado be acquiring?
Integra has one major principal asset, the Lamaque project in Quebec. The operation hosts a resource of just around 8.6 million tonnes of gold (a combination of two different grades of gold).
Following a recent economic assessment that was conducted in February this year, Lamaque could potentially host an underground operation producing around 123,0000 ounces of gold per year for the next 10 years.
George Burns, President and Chief Executive Officer of Eldorado Gold, stated, "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 implications for Eldorado
As a leading, ow cost gold producer with mining, development and exploration operations in Turkey, Greece, Servia, Romania and Brazil, the acquisition represents the first step in establishing a major footprint in the Canadian mining industry.
Eldorado prides itself as a company on its low-cost strategy, highly skilled and dedicated workforce, safe and responsible operations, and long-term partnerships with the communities where it operates.
