The proposed deal between the two West African-focused gold miners comes at a time when gold prices have surged to record levels
The proposed Teranga purchase would add another operating mine – Wahgnion – to Endeavour’s existing portfolio in Burkina Faso (Credit: Teranga Mining)
Endeavour Mining has confirmed it is “in discussions” with Teranga Mining over a potential merger.
The proposed deal between the two West African-focused gold miners comes at a time when gold prices have surged to record levels, as investors have turned to the commodity amid ongoing disruption to financial markets caused by the coronavirus pandemic.
Since the news was first reported by Bloomberg, Teranga shares have risen 10% in Toronto while shares of Endeavour fell 0.8%.
In response to the press report, Endeavour confirmed in a statement that it is “in discussions” with Teranga regarding a “potential merger of equals style combination”.
It added: “These discussions may or may not result in an agreement in respect of a potential transaction and any transaction would only be pursued if the board of Endeavour believed that it represented a compelling value creation opportunity for its shareholders.
“Endeavour does not intend to comment further unless required by applicable securities laws.”
Potential merger with Teranga will allow Endeavour access to Senegal operations
In Africa, Endeavour currently operates two mines in Côte d’Ivoire, four mines in Burkina Faso, four potential development projects and a portfolio of exploration assets on the Birimian Greenstone Belt across Burkina Faso, Côte d’Ivoire, Mali and Guinea.
At the close of play on Monday, the miner had a market valuation of 5.23bn Canadian dollars ($4bn), while Teranga was worth C$2.2bn ($1.7bn).
The latest merger talks build upon Endeavour’s C$1bn ($736m) acquisition of rival Semafo back in July, in a deal that created West Africa’s largest gold mining company and secured the firm six key gold mining assets.
According to Reuters, the proposed Teranga purchase would add another operating mine – Wahgnion – to Endeavour’s existing portfolio in Burkina Faso and provide a route to Senegal through Teranga’s operations.
Last year, Teranga secured Barrick Gold’s 90% stake in the Massawa project in Senegal, the country’s largest-producing gold mine, in a $430m deal.