Precious metals company Steppe Gold has agreed to take full ownership of gold producer Boroo Gold in an all-share transaction.
Under the terms of the binding term sheet, Steppe Gold will acquire all of the Boroo Gold common shares which will result in the beneficial shareholder of Boroo Gold, directly or indirectly holding a 58.8% interest in Steppe Gold.
Upon the completion of the proposed deal, Steppe Gold will be the sole shareholder of Boroo Gold.
Through the acquisition of Boroo Gold, Steppe Gold aims to increase its production from 30,000 to 90,000oz per annum in 2024 and 2025.
The precious metals firm will also increase production to 160,000oz per annum by 2026 as its fully owned ATO gold mine’s phase 2 expansion comes on stream.
Steppe Gold will also receive strong cash flow and increased financial strength to service ATO gold mine phase 2 expansion debt and project financing.
Besides, the acquisition will help the company in financing exploration programmes and further acquisition opportunities in Mongolia.
Steppe Gold chairman and CEO Bataa Tumur-Ochir said: “The Boroo Gold acquisition will establish Steppe Gold as Mongolia’s largest and leading gold producer.
“Our production is expected to triple over the next two years to 90,000 ounces and 160,000 ounces by 2026, increasing our financial strength to repay the non-dilutive $150m project financing for the ATO Gold Mine Phase 2 Expansion and to advance our exploration portfolio.”
Founded in 1997, Boroo Gold has an average gold production of more than 60,000oz per annum and an expected mine life of beyond 2030.
According to Steppe Gold, Boroo parties will have the first right to acquire the Tres Cruces gold project in Peru after the completion of the transaction at fair market value.
Steppe Gold said that the proposed acquisition is subject to the negotiation of definitive agreements.
Following the negotiation of the definitive agreements, the transaction will be subject to all necessary regulatory, stock exchange and court approvals, as well as the approval of the proposed deal by the shareholders of both parties.
