Canadian firm Leagold Mining is planning to make an offer to acquire all issued and outstanding shares of Brio Gold in a deal worth $264m.
Under the offer, Leagold will issue 0.922 of a share to holders of each Brio unit.
The proposed transaction comes following Leagold’s acquisition of Los Filos mine in Mexico in April last year from Goldcorp.
Leagold Mining CEO Neil Woodyer said: “The combination with Brio represents a unique opportunity to acquire a portfolio of producing assets with a meaningful growth profile.
“The combined operations are expected to produce approximately 450,000oz in 2018, with the potential for growth to over 700,000oz in 2020 at all-in sustaining costs in the mid-$8,001s.
“In addition, this combination reduces overall business risk by having four operating mines in two jurisdictions.”
The deal is expected to provide Leagold a strong platform to expand within Mexico and Brazil.
The company expects the combined operations to achieve production of between 420,000 and 475,000oz this year with potential for growth to more than 700,000oz per year in 2020.
Once the transaction is completed, Brio shareholders will hold around 42% ownership interest in the combined entity.
Leagold has signed a support agreement in support of the transaction with Yamana, which holds around 53.6% of ownership of Brio on a non-diluted basis.
Under the offer, Yamana will have about 22% ownership in the enlarged company.
Mining Technology
