Eldorado Gold Corporation announced that it has entered into a definitive agreement with Integra Gold Corp. (Integra, TSXV:ICG), pursuant to which Eldorado has agreed to acquire all of the issued and outstanding common shares of Integra that it does not currently own.
Under the Arrangement, shareholders of Integra will be entitled to receive, at their option, for each Integra share they own either (i) 0.24250 Eldorado shares, (ii) C$1.21250 in cash, in both (i) and (ii) subject to pro ration, or (iii) 0.18188 of an Eldorado share and C$0.30313 in cash. The maximum number of shares issuable by Eldorado under the Arrangement will be approximately 77 million (based on the number of Integra shares outstanding less Integra shares currently owned by Eldorado). The maximum amount of cash payable by Eldorado under the Arrangement will be approximately C$129 million equal to 25% of the total consideration. The total transaction value is approximately C$590 million, inclusive of Integra shares held by Eldorado.
Eldorado’s offer represents:
- A value of C$1.21250 for each Integra common share based on the May 12, 2017 closing price of Eldorado common shares on the Toronto Stock Exchange
- A premium of approximately 52% to Integra’s May 12, 2017 closing price and a premium of 46% based on the volume weighted average prices (“VWAP”) of both companies on the Toronto Stock Exchange for the 20 day period ending May 12, 2017
Upon completion of the transaction and based on the maximum number of shares issuable under the Arrangement, current Eldorado and Integra shareholders would hold approximately 90% and 10% of the combined Company, respectively.
Integra’s principal asset is the Lamaque project near Val-d’Or, Quebec. Lamaque hosts an NI 43-101 indicated resource of 5.1 million tonnes at a grade of 9.13 g/t gold and an inferred resource of 3.5 million tonnes at a grade of 7.94 g/t gold (5.0 g/t gold cut-off)1. A preliminary economic assessment was completed in February 2017 that envisions a high-grade underground operation producing 123,000 ounces of gold per year at all-in sustaining costs of US$634 per ounce over 10 years. Integra is currently in the process of advancing underground ramp development to facilitate underground exploration and completion of a bulk sample.
The transaction will be carried out by way of a court-approved plan of arrangement and will require approval by Integra shareholders at a special meeting of Integra shareholders by:
- at least 66⅔% of the votes cast by all the shareholders of Integra; and
- a simple majority of the votes cast by the shareholders of Integra, excluding votes from certain shareholders, including Eldorado, as required under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.
In addition to shareholder approval by Integra shareholders, the Arrangement is also subject to the receipt of certain regulatory, court and stock exchange approvals, and other closing conditions customary in transactions of this nature. It is anticipated that the special meeting of Integra shareholders will be held in July 2017.
Eldorado owns 62,170,095 common shares in the capital of Integra, constituting 13% of the outstanding common shares of Integra on an undiluted basis. Following completion of the transaction, Eldorado will own 100% of the issued and outstanding common shares of Integra.by