Eldorado buys project developer Integra for C$590m

VANCOUVER (miningweekly.com) – Canadian multinational miner Eldorado Gold has agreed to buy fellow Canadian project developer Integra Gold in a cash-and-scrip deal worth about C$590-million, the companies announced late on Sunday.

Vancouver-headquartered Eldorado, which has operations and development projects in Turkey, Greece, Romania and Brazil, will gain control of Integra’s Lamaque project near Val-d'Or, Quebec, which boasts a compliant indicated resource of 5.1-million tonnes grading 9.13 g/t gold and an inferred resource of 3.5-million tonnes grading 7.94 g/t gold, both at a 5 g/t gold cutoff.

“From previous experience of building and operating gold mines in Canada, I am excited about Eldorado’s entry into the Eastern Abitibi region of Canada. With our current balance sheet strength post the sale of our Chinese assets, this acquisition represents a use of the proceeds complementing our existing portfolio of high-quality, low-cost assets,” Eldorado president and CEO George Burns stated.

Integra completed a preliminary economic assessment in February that envisioned a high-grade underground operation producing 123 000 oz/y of gold at all-in sustaining costs of $634/oz over ten years. Integra is currently in the process of advancing underground ramp development to facilitate underground exploration and completion of a bulk sample.  

Under terms of a definitive agreement, Integra shareholders will receive at their option, either 0.2425 Eldorado shares, C$1.21 in cash for each Integra share held, or 0.18188 of an Eldorado share and C$0.30 in cash.

Eldorado, which currently holds about 13% of Integra, will issue up to a maximum of 77-million shares, and pay up to a maximum of C$129-million, or 25%, of the transaction value, in cash.

Eldorado’s offer represents a value of C$1.21 for each Integra common share based on Friday’s closing price of Eldorado common shares on the TSX, and a premium of about 52% to Integra’s closing price and a premium of 46% based on the volume-weighted average prices of both companies on the TSX for the 20-day period ending Friday, Eldorado advised.

“We view this transaction as a win-win for all stakeholders. Our stakeholders in Val-d’Or can leverage off of a well-financed, responsible gold producer who has chosen Quebec as the jurisdiction from which they can establish an operating presence in Canada. Eldorado gains exposure to one of the most productive mining camps in the world, supported by a long-established culture of mining professionals and community partners,” Integra president and CEO Stephen de Jong noted.

The deal is subject to Integra shareholder approval, with voting slated for July, as well as regulatory, court and exchange approvals. Following the deal, current Integra shareholders will own about 10% of Eldorado.

Both the Eldorado and Integra boards have approved the proposed transaction after reviewing third-party fairness opinions.

News of the acquisition lifted Integra’s TSX-V-listed stock 40% to a new 52-week high of C$1.11 apiece.