Loading ...TORONTO, ON–(Marketwired – February 16, 2018) – Brio Gold Inc. (“Brio Gold”) (TSX: BRIO) is pleased to announce that it has entered into a definitive agreement (the “Arrangement Agreement”) pursuant to which Leagold Mining Corporation (“Leagold”) will acquire all of the issued and outstanding shares of Brio Gold (the “Transaction”), based on an increased value for Brio Gold shareholders. The combined company will be a high-growth, intermediate gold producer, having four operating mines and an advanced-stage development project, which are located in Mexico and Brazil, two attractive mining jurisdictions in the Americas. The combined company is expected to produce approximately 447,5001 ounces of gold in 2018 on a pro forma basis and will have the potential to achieve annual production of over 700,000 ounces by 2020 at all-in sustaining costs2 (“AISC”) in the mid-$800s.
Under the terms of the Arrangement Agreement, shareholders of Brio Gold will receive 0.922 of a Leagold common share and 0.4 of a Leagold share purchase warrant (each whole share purchase warrant, a “Warrant”), for each common share of Brio Gold held (the “Consideration”). Each full Warrant will be exercisable to acquire one common share of Leagold at a price of C$3.70 for a period of two years from closing of the Transaction.
The Consideration implies total value of approximately C$2.67 per Brio Gold common share, consisting of C$2.57 in Leagold share consideration based on the 20-day volume weighted average trading price of Leagold shares on the Toronto Stock Exchange (the “TSX”) as of February 15, 2018, and approximately C$0.10 in additional warrant consideration. The Consideration represents a premium of 51% to the closing share price of Brio Gold on the TSX on January 22, 2018, prior to Leagold’s announcement of its intention to commence a take-over bid for Brio Gold. The implied equity value for Brio Gold based on the Consideration is C$314 million.