True Gold has 80% stake in Karma gold mine in Burkina Faso. The mine includes three mining permits including Karma, Kao and Nami.
As per the deal, Endeavour will provide a $15m convertible bridge loan to enable True Gold complete construction of the Karma mine.
Expected to commence production in late March or early April 2016, the mine will complement Endeavour’s existing portfolio of four operating mines along with its fully permitted Houndé project.
Endeavour also expects the acquisition to increase its gold production rate by about 110,000oz to 120,000oz per year at a low AISC of about $700/oz in years one to five.
Endeavour Mining CEO Neil Woodyer said: "Karma is nearing production, and Endeavour Mining has both the financial strength and an experienced operations team to ensure Karma’s value is maximised during this important stage.
"While True Gold shareholders are receiving an attractive premium and an opportunity to participate in a larger diversified West African producer, Endeavour Mining shareholders are gaining a new, low-cost mine that boosts group production while reducing group AISC/oz in a value accretive transaction.
"In the long term, the Karma Mine has extensive exploration potential to extend its mine life."
Upon completion of the transaction scheduled in April 2016, Endeavour will integrate Karma into its existing operations management structures.
The transaction is subject to customary conditions, including receipt of all necessary court, shareholder and regulatory approvals.
Meanwhile, Endeavour’s largest shareholder La Mancha has selected to exercise its pre-emptive right to maintain its 30% interest.
La Mancha will also contribute additional cash funding of about C$82.6m ($61.5m) in support of the combined company’s future growth.
