The deal is backed by IAMGOLD and INV Metals’ directors and officers, who have a combined stake of 47%
Currently, Dundee Precious Metals has a stake of 23.5% in INV Metals. (Credit: Tumisu from Pixabay)
Dundee Precious Metals (DPM) has agreed to take full ownership of INV Metals by acquiring the remaining stake of around 76.5% in the latter for CAD104m ($86.35m) in an all-stock deal.
The deal values 100% of INV Metals at about CAD132m ($109.6m).
INV Metals is a Canadian mineral resource company, which is focused on advancing the 100% owned Loma Larga gold-copper-silver project in Ecuador.
On the other hand, Dundee Precious Metals is a Canadian gold mining company with operations in Bulgaria, Namibia, and Serbia.
Dundee Precious Metals is taking up the deal as it believes that the Loma Larga project is well-aligned with its core strengths in unlocking value.
Besides, the company said that Loma Larga has similar geology, mining method, and processing flow sheet to its producing Chelopech underground copper-gold mine in Bulgaria.
Dundee Precious Metals also said that a portion of Loma Larga’s production includes complex concentrate, which can be processed at the company’s Tsumeb smelter or other outlets.
Loma Larga can potentially yield around 200,000 gold ounces per year on an average in its first five years, said the Canadian gold miner.
Dundee Precious Metals president and CEO David Rae said: “This transaction leverages our proven strengths as an environmentally and socially responsible mining company, and we look forward to engaging with all national and local stakeholders.
“Loma Larga adds a high-quality, advanced stage gold project to our portfolio that has the potential to generate meaningful production growth and significant value for our stakeholders.”
As per the terms of the deal, each of the INV Metals’ shares not owned already by Dundee Precious Metals will be exchanged for 0.091 of the latter’s shares. The exchange ratio values each of the INV Metals’ shares at CAD0.8 ($0.66).
Following the closing of the deal, existing Dundee Precious Metals and INV Metals shareholders will own stakes of around 94.5% and 5.5%, respectively in the combined company.
INV Metals CEO Candace MacGibbon said: “We believe DPM is uniquely positioned to move Loma Larga forward, and as such, this transaction is not only an excellent outcome for our shareholders, but also one with the potential to offer tremendous benefits for both the project’s national and local stakeholders in the coming years.”
The deal is being backed by IAMGOLD and INV Metals’ directors and officers, who hold 36% and 11% stakes respectively.
Subject to INV Metals’ shareholder and court approvals, applicable regulatory approvals, and other customary closing conditions, the deal is expected to close after July 2021.