Junior Golds – Takeover Hopes
Posted: March 27, 2013 Filed under: Juniors, Takeovers | Tags: AEM, Agnico-Eagle, Agnico-Eagle Mines, Board of directors, Business, Gold, New York Stock Exchange, Toronto Stock Exchange 1 Comment »
English: Logo of Agnico-Eagle Mines Limited . (Photo credit: Wikipedia)
(AEM : TSX : $40.85)
Urastar Gold
(URS : TSX-V : $0.24)
FINALLY, the majors are buying!
Junior gold investors have been rewarded for their patience with news that gold major Agnico-Eagle is buying gold junior Urastar Gold for $0.25 per share, which is a 42.9% premium to the previous day’s closing price.
The offer values the URS, on a fully-diluted basis, at $10.75 million. Out-of-the-money share purchase warrants and options will be cancelled as part of the transaction. Agnico-Eagle has agreed to advance approximately $1.6 million to the company on closing to fund the payment of the company’s transaction expenses and severance costs. The board of directors of Urastar has unanimously approved the transaction and each of the directors and officers of URS, as well as certain other URS securityholders, collectively holding approximately 27.12% of the number of Urastar securities entitled to vote at the meeting, have entered into support agreements with Agnico-Eagle and agreed to vote their securities in favor of the arrangement.
Related articles
- Agnico-Eagle Mines swings to fourth quarter profit of $82.8 million (vancouverdesi.com)
Hecla To Buy Gold Producer Aurizon
Posted: March 5, 2013 Filed under: Gold, Senior Producers, Silver, Takeovers | Tags: Alamos, Aurizon, BMO Capital Markets, CIBC World Markets, Hecla, Hecla Mining, Idaho, Toronto Leave a comment »
English: The logo of Hecla Mining Company. (Photo credit: Wikipedia)
Hecla Mining Co. (HL), which operates silver mines in Alaska and Idaho, agreed to buy gold producer Aurizon Mines Ltd. (ARZ) for about C$796 million ($774 million) in a cash-and-stock deal that trumps a rival offer.
Investors will receive C$4.75 or 0.9953 of a Hecla share for each Aurizon share, Coeur D’Alene, Idaho-based Hecla said today in a statement. Hecla is offering as much as C$513.6 million in cash and as many as 57 million shares, according to the statement.
Aurizon on Jan. 23 rejected a C$780 million unsolicited takeover offer by Alamos Gold Inc. (AGI)and began a search for alternative suitors. Alamos, the biggest shareholder in Aurizon with a 16 percent stake, offered C$4.65 per share for the Vancouver-based company.
The Aurizon bid is Hecla’s latest attempt to increase scale through acquisitions, adding underground mines similar to ones Hecla already operates and reduce the company’s exposure to base metals by boosting its gold production, said Andrew Kaip, an analyst at BMO Capital Markets in Toronto.
“It provides them another operation underground, which is their expertise, in a safe jurisdiction,” Kaip said today in a telephone interview.
Deal Premium
The Hecla transaction is valued 39 percent more than Aurizon’s closing share price in Toronto on Jan. 11, before Alamos made its offer. The premium is 12 percent based on the closing share price of Aurizon and Alamos on March 1, Hecla said. Aurizon’s board of directors has unanimously backed the Hecla offer as fair and all of its directors and senior officers have agreed to vote their shares in favor of the deal, it said.
Hecla fell 13 percent to $4.04 at 10:40 a.m. in New York after earlier dropping as much as 14 percent, the biggest intraday decline since Jan. 11. Aurizon rose 3.4 percent to C$4.50 in Toronto.
Hecla has received a commitment for $500 million in financing from Bank of Nova Scotia and the transaction won’t require the approval of Hecla shareholders, the company said in the statement. Hecla said it has the right to match any competing offer.
The deal requires approval from 66 percent of Aurizon shareholders and Hecla is seeking to complete the transaction in the second quarter.
Hecla’s bid may be a stage of a bidding war, Heiko Ihle, an analyst at Euro Pacific Capital Inc. in Toronto, wrote in a note today.
‘Bidding War’
“We do not believe that this is the final chapter of a bidding war for Aurizon, but rather a way for the board to announce another bid before the expiration of the poison pill this week,” Ihle said in the note today.
Aurizon said in January it had adopted a shareholder rights plan while it searched for alternatives to the Alamos offer.
Bank of America Merrill Lynch is advising Hecla on the transaction and Cassels Brock & Blackwell LLP is serving as Canadian legal counsel.
Aurizon is being advised by Scotia Capital Inc. and law firms DuMoulin Black LLP; Blake, Cassels & Graydon LLP; and Paul, Weiss, Rifkind, Wharton & Garrison LLP. CIBC World Markets and Blakes are advising the special committee of Aurizon’s board.
Keegan Resources
Posted: February 21, 2013 Filed under: Takeovers | Tags: Africa, Asanko Gold, Business, Ghana, Keegan Resources, Mining and Drilling, Precious metal, Toronto Stock Exchange Leave a comment »
English: Map of Ghana Español: Mapa de Ghana (Photo credit: Wikipedia)
Keegan Resources
KGN : TSX : $3.24
PMI Gold
PMV : TSX : $0.64
In the shadow of an extremely challenging junior gold market, Keegan Resources and PMI Gold announced that they are terminated their merger plans.
The decision comes as a result of the mutual determination of PMV and KGN that it is unlikely that PMV’s shareholders will approve the transactions contemplated by the Arrangement Agreement. Both KGN and PMV noted that the termination of the Arrangement Agreement is not on account of any differences arising between the respective boards about valuation issues or on account of any new facts having come to their attention. After the announcement, KGN noted that they continue to aggressively pursue its transition from an exploration and development company to a near term African focused gold producer by advancing its Esaase Gold Project in Ghana towards construction in Q4/13 and ultimately production in 2015. Completion of the various Feasibility Studies and the permitting process remain on track for Q3/13. KGN
also announced that it will change its name to Asanko Gold, reflective of the region in Ghana where it operates .
Orka Silver Takeover Battle
Posted: February 14, 2013 Filed under: Silver, Takeovers | Tags: Bay Street, Coeur, Coeur d'Alene Mines, Durango, First Majestic Silver, New York Stock Exchange, Silver, Toronto Stock Exchange Leave a comment »
English: Logo for First Majestic Silver (Photo credit: Wikipedia)
Orko Silver* (OK : TSX-V : $2.60)
Coeur D’alene Mines* (CDE : NYSE : US$21.06)
First Majestic Silver* (FR : TSX : $18.17)
The largest U.S.-based silver miner, Coeur d’Alene Mines, has offered to buy Orko Silver for ~$384 million, topping a previous bid from First Majestic Silver and opening a race for control of one of the world’s largest undeveloped silver deposits.
Coeur’s cash-and-shares offer values Orko at ~$2.70 a share, about 25% more than First Majestic’s stock-based offer, based on Tuesday’s closing share prices. Orko said Wednesday that its board has determined that Coeur’s offer is superior to First Majestic’s offer, which was worth $2.72 per Orko share when it made its offer on December 16 but i s now valued at ~$2.16 as First Majestic’s shares have fallen.
Coeur said it was best equipped to develop La Preciosa, one of the world’s largest undeveloped primary silver projects. Coeur’s CEO stated, “The La Preciosa project has long-life mine potential and could produce about 7 to 9 million ounces of silver annually.”
Despite Orko’s Board backing Coeur’s more cash-rich offer, at least one Bay Street analyst believes there is a reasonable chance of a counter offer. He stated, “First Majestic has a strategic interest in maintaining a strong position in Durango. Having a rival coming into the state has got to be weighing on the mind of the board.”
Alamos Gold
Posted: January 30, 2013 Filed under: Gold, Takeovers | Tags: AGI, ARZ, Casa Berardi, Quebec, Shareholder, Shareholder rights plan, Takeover, Toronto Stock Exchange Leave a comment »Alamos Gold
AGI : TSX |
BUY, Target C$22.00)
AuRizon rejects bid, proposes shareholder rights plan
We maintain our BUY rating on Alamos Gold. The board of Aurizon Mines (ARZ:TSX has recommended that ARZ shareholders reject the offer recently put forward by AGI and has also elected to adopt a shareholder rights plan effective immediately (but subject to regulatory approval and ratification by ARZ shareholders).
The Board of ARZ believes that the AGI offer is financially inadequate and opportunistic. While ARZ’s key asset, Casa Berardi may be attractive to a number of other companies given its status as a cash flow generating asset in a low risk jurisdiction, we continue to view the likelihood of a third party offer as low in light of 1) AGI’s current 16% stake in ARZ; 2) the significant cash component involved in the AGI offer; 3) the recent operational challenges at Casa Berardi that may prompt suitors to take a cautious approach while evaluating a significantly higher premium.
In addition, we believe that most other companies that may be interested and could potentially afford to pay a premium to the AGI offer have either 1) already completed recent material acquisitions or 2) may be focused on resolving operational challenges of their own before evaluating
external acquisition opportunities. In addition, annual production levels of 150,000 oz from Casa Berardi many not be sufficient to generate interest from a larger intermediate/senior producer.
As such, we expect that AGI will likely challenge the shareholder rights plan from a legal standpoint and believe there is a high likelihood that the AGI offer could be successful. We continue to view the transaction as potentially accretive to Alamos with the added benefits of geographic diversification and lower development risk in the company’s asset portfolio.
Valuation
Pending a definitive outcome of the takeover bid, our valuation and forecasts exclude any contribution from a potential Aurizon acquisition. Our 12-month target price remains unchanged at C$22.00 based on 0.95x our 5%/peak NAVPS estimate of US$22.97 assuming US$/C$ parity.
Upcoming Potential Catalysts
Results of ARZ takeover bid
Related articles
Argonaut Gold Inc. Update
Posted: December 12, 2012 Filed under: Gold, Mexico, Takeovers | Tags: Argonaut Gold, Gold as an investment, La Colorada, Mining, Precious metal, Prodigy, San Antonio, Toronto Stock Exchange Leave a comment »
I’m With Magino (Photo credit: ishane)
Argonaut Gold Inc.
AR : TSX : C$9.37
BUY Target: C$16.00
PRODIGY GOLD ACQUISITION CLOSES; FURTHER GROWTH FROM A “RIGHTSIZED” MAGINO
We reiterate our BUY rating on Argonaut Gold following the close of the Prodigy Gold acquisition that sets the stage for further growth beyond El
Castillo, La Colorada and San Antonio. Argonaut Gold remains an attractive valuation in the context of one of the most attractive, fully funded growth profiles in the sector.
With a proven management team at the helm and expected strong operational momentum over the next 12 months we see strong re-rating potential following execution on the ramp-ups at El Castillo and La Colorada in addition to the advancement of the San Antonio and Magino projects.
Highlights
We have incorporated the Magino project into our valuation and forecasts. Management has indicated the likelihood of a smaller-scale
operation at Magino based on a smaller but higher grade mineable resource vs. the 20,000 tpd operation considered in the 2011 PEA.
Given the cost escalation and technical/ramp-up risks we have seen with larger scale lower grade projects, this may be the right decision since a
smaller operation should best facilitate cost control and management of development risks. In addition, higher grades and lower capital
requirements may improve investment returns and accelerate payback. Optionality upside from the lower grade mineralization remains and could provide for future substantial upside under a higher gold price by supporting a potential production expansion.
Our modeled profile for Magino assumes a 10,000 tpd operation for initial capital costs of $400 million, with average annual production of 179,000 oz over an 11-year mine life at total cash costs of $624/oz. Using a 7.5% discount rate for Magino and ascribing a $25/oz in-situ value to
unmodeled M&I resources (reflecting expansion upside), we estimate that the transaction is 13% accretive to our 5%/Spot NAVPS estimate.
Valuation
Our 12-month target price increases to C$16.00 from C$15.50 based on 1.0x (previously 1.1x) our 5%/peak NAVPS estimate of US$16.09 assuming US$/C$ parity.
Related articles
New Gold Bid For Peak Mine
Posted: December 7, 2012 Filed under: Gold, Juniors, Takeovers | Tags: Australia, Canada, Conquest Mining, Gold as an investment, Mining, Newcrest Mining, Toronto Stock Exchange, Wall Street Journal Leave a comment »New Gold
(NGD : TSX : $10.57)
A report in The Wall Street Journal commented that Evolution Mining had made a bid for New Gold’s Peak Mine. NGD has not confirmed the report. No terms are known, but the article stated that NGD has rejected the offer saying it is too low.
The deal suggests that the asset could be worth A$250 million; however, no details were provided.
Evolution was created last year through combination of Catalpa Resources, Conquest Mining and assets owned by Newcrest Mining. Evolution Mining recently secured a loan facility worth approximately A$200 million. NGD’s Peak Mine is a non-core asset for the company and is situated in Australia versus the remainder of the company’s assets which are in North America.
Peak produced 85,000 ounces of gold and 12.7 million pounds of copper in 2011, with cash costs in the $650-750 per ounce
range. At the end of September NGD had $147 million in cash and recently raised $500 million through a debt offering.
Related articles
- Is a Global Gold Supply Crunch Forming? (safehaven.com)
Agnico – Eagle Sells Queenston
Posted: November 27, 2012 Filed under: Gold, Precious Metals, Takeovers | Tags: AEM, Agnico-Eagle, Agnico-Eagle Mines, Osisko Mining, QMI, Queenston Ontario, Shares outstanding, Toronto Stock Exchange Leave a comment »English: Logo of Agnico-Eagle Mines Limited . (Photo credit: Wikipedia)
Agnico-Eagle Mines* (AEM : TSX : $56.89)
Osisko Mining* (OSK : TSX : $8.41)
Queenston Mining* (QMI : TSX : $5.10)
I’m out.
Agnico-Eagle announced that it has come to an agreement to sell its 7,795,574 shares of Queenston Mining to Osisko
Mining for $5.43 per share. The Shares represent approximately 9.21% of the issued and outstanding shares of QMI.
Upon the closing of the transaction, which is expected to occur on November 29, 2012, AEM will hold no shares in QMI. AEM will continue to hold warrants in QMI to purchase 3,301,887 Shares at an exercise price of $6.45 per share, representing approximately 3.76% of the issued and outstanding shares on a partially-diluted basis.
Recently OSK announced that they entered into an agreement with QMI to acquire them. As part of the deal QMI shareholders will receive 0.611 shares in OSK for every QMI share they own. The transaction values QMI’s equity at approximately $550 million on a fully-diluted, in-the-money basis and implies an enterprise value of approximately $400 million.
Related articles
- Osisko Mining Buys Queenston (ampgoldportfolio.com)
- Osisko’s timing questioned with Queenston deal (business.financialpost.com)
Belo Sun Mining Merger Speculation
Posted: November 21, 2012 Filed under: Exploration Companies, Gold, Speculative, Takeovers | Tags: Bay Street, Belo Sun Mining, Mergers and acquisitions, Open-pit mining, Ounce, Queenston Ontario, Sun, Toronto Stock Exchange Leave a comment »
400 ounces gold Good Delivery bar (Photo credit: GoldMoneyNews)
Belo Sun Mining (BSX : TSX : $1.64)
Shares of Belo Sun Mining have outperformed the S&P/TSX gold index by approximately 34% this month, as takeout speculation grows given that M&A activity has been picking up in the sector with recent acquisitions of developers such as Prodigy Gold (PDG) and Queenston Mining (QMI).
The next catalyst for the stock appears to be a resource update potentially early December. The company’s Volta Grande project is currently host to a global resource, all categories, of 5.17 million ounces with an average grade of 1.74 g/t including 2.84 million ounces grading 1.69 g/t in the openpit, Measured and Indicated category.
A Bay Street analyst noted that the updated resource could potentially grow the global resource over 6 million ounces and increase the open-pittable, M&I resource to close to 4 million ounces, with grades staying similar. The larger the resource gets and the more the project advances, the company’s attractiveness as a takeover target could potentially increase. At current levels the stock trades at an EV/oz multiple of $76/oz, which is a premium to the explorer/developer average of $62/oz, which is understandable given the attractive grades and jurisdiction.
However, takeovers of primary exploration/development assets in the last three years have been done at an average multiple of $125/oz, so their still appears to be upside in the event of a takeover. With large high grade open-pit gold projects (in stable jurisdictions) becoming increasingly scarce, this asset could garner a lot of interest from larger producers. Beyond the resource update, the next derisking catalysts will likely be the Prefeasibility Study in early Q1/13 and the potential receipt of the Preliminary License also in Q1/13
Give Yourself The Gift Of Money This Christmas The Gold Investor’s Handbook – click here for investment profits and much more detail on the ins and outs of investing in gold
Available Now at Amazon.com
-Related articles
