Fortuna Silver Mines has agreed to acquire Canadian gold mining company Roxgold in a stock-cum-cash deal worth around CAD1.1bn ($886m).
Roxgold’s assets are located in West Africa. These include the producing Yaramoko Gold Mine in Burkina Faso and the advanced stage Séguéla Gold Project in Côte d’Ivoire.
The company is also pursuing exploration at the Boussoura gold project in Burkina Faso, located nearly 180km south of the Yaramoko Project, and 10km north of the border with Côte d’Ivoire.
Fortuna Silver Mines is a precious metals mining company based in Canada. The company has operations across Peru, Argentina, and Mexico.
The resulting merger between the firms is expected to create a low-cost intermediate global precious metals producer.
Fortuna Silver Mines president and CEO Jorge Ganoza said: “With Roxgold we are acquiring a complete business platform which brings: i) low-cost gold production; ii) a permitted Feasibility stage development project; iii) a robust exploration pipeline; and iv) key members of a seasoned executive team of proven mine builders, developers, and explorers in West Africa.”
As per the terms of the deal, Roxgold’s shareholders will be issued 0.283 common shares of Fortuna Silver Mines and CAD0.001 ($0.00081) for each of the common shares held in Roxgold.
Post-merger, Fortuna Silver Mines’ shareholders will own a stake of around 64.3% in the combined entity, while Roxgold’s shareholders will own a stake of nearly 35.7%.
Roxgold president and CEO John Dorward said: “This transaction recognizes the commitment and execution of the Roxgold team and the value creation over recent years, as we advanced from developer to low-cost gold producer with a growth pipeline that few of our peers could match.
“The combination with Fortuna provides our shareholders with an immediate premium and a unique opportunity to participate in the creation of a new global mid-tier precious metals producer with significant organic growth and cash flow generating potential.”
The combined company will have an expected annual gold equivalent production of around 450,000 ounces.
The deal, which will be subject to shareholders’ approvals, court and stock exchanges approvals, and other conditions, is likely to close by late June or early July 2021.
