Endeavour Mining to buy Avion Gold
Wednesday, 08 Aug 2012
In its quest to become a 300 000 oz/y gold producer focused in West Africa, Toronto-listed Endeavour Mining on Tuesday entered into a definitive agreement to buy Avion Gold for C$389-million.
The sale was based on the 88 Canadian cents a share the company’s stock closed at on the TSX on Tuesday, representing a 57% premium.
The all-script transaction would see Endeavour’s immediate production guidance increase by half to between 282 000 oz and 304 000 oz for the year.
Under the sale agreement Endeavour would extend a $20-million bridge loan to Avion to restart the Tabakoto mill expansion, in Mali, after the upgrade was deferred during political unrest in the country in May.
"Avion's Tabakoto mine and Kofi property, in western Mali, and the advanced Houndé property, in Burkina Faso, fit very well into Endeavour's production and development portfolios," Endeavour CEO Neil Woodyer said in a statement.
He added, although, that on closing the deal, which was expected in October, Endeavour’s output would be significantly boosted, concluding the Tabakoto mill expansion and completing construction of the nearby Agbaou mine, gold production is expected to climb to 450 000 oz/y.
Further, Avion CEO John Begeman would join Endeavour’s board of directors.
Endeavour’s shares closed up 1.69% at C$2.40 apiece, while Avion stocks rose 5.66% to close at 56 Canadian cents apiece.