Under the terms of the deal, St Barbara will acquire all of the issued and outstanding shares in Atlantic for C$2.90 in cash per Atlantic share held.
Atlantic Gold owns and operates Moose River Consolidated (MRC) in Nova Scotia, Canada. The Moose River, which was declared commercial production in March 2018, comprises one producing open-pit (Touquoy) and three others in development.
MRC is estimated to hold mineral resources of 2.4 Moz inclusive of mineral reserves of 1.9 Moz.
St Barbara managing director and CEO Bob Vassie said: “St Barbara has consistently communicated to the market that the Company has been assessing a range of inorganic growth opportunities and the acquisition today demonstrates the Company’s commitment to executing inorganic growth that is strongly aligned with St Barbara’s strategic plan.
“The addition of Moose River to the portfolio diversifies St Barbara’s production base with a low cost producing asset in a very favourable and prospective jurisdiction. It is a sustainable long life operation of scale with a low AISC position which generates impressive margins.
“The asset also has significant growth potential which St Barbara identifies as an exciting opportunity.”
St Barbara expects the acquisition to diversify its production base, and offer significant growth potential at MRC through planned resource and reserve expansion as well as near mine exploration.
Additionally, the acquisition is expected to provide St Barbara with a platform for future growth in mining jurisdiction with low geopolitical risk.
The transaction, however, excludes Atlantic’s 36% interest in Velocity Minerals, which is planned to be spun out to existing Atlantic shareholders following completion of the deal.
Atlantic chairman and CEO Steven Dean said: “St Barbara’s C$2.90 cash per share offer delivers an immediate and attractive premium to our shareholders.
“It not only recognizes the value of our current plan for the MRC Mine, but rewards shareholders for the future growth and exploration potential that defines MRC as a truly world class asset.
“In addition to the cash consideration, SpinCo provides Atlantic shareholders with ongoing exposure to the Rozino Project which we believe has strong value potential.”
Upon completion of deal, Atlantic will de-list from the TSX. Atlantic and its associated entities will also become part of St Barbara’s corporate structure.
Scheduled to be completed in July 2019, the transaction is subject to customary closing conditions.