Tahoe Resources to Buy Canadian Gold Producer
08 Febbraio 2016 - 6:10PM
Dow Jones News
Tahoe Resources Inc. on Monday agreed to buy Canadian gold
producer Lake Shore Gold Corp. in a friendly, all-stock deal worth
about 792 million Canadian dollars ($569 million).
The deal comes as mining companies globally seek cost-savings
opportunities and turn their focus to low-cost, low-risk operations
amid a continued slump in precious-metals prices.
The proposed purchase will give Tahoe two mines near Timmins in
northern Ontario--the Timmins West and Bell Creek mines. Tahoe owns
the Escobal precious- and base-metal mine in Guatemala and the La
Arena and Shahuindo gold mines in Peru.
"The combination with Lake Shore Gold enhances Tahoe's position
as the new leader in precious metals by adding another low-cost
operation in Timmins, one of the most prolific gold camps in the
world. We are impressed by the long-term presence and see
tremendous regional opportunities going forward," Tahoe Executive
Chairman Kevin McArthur said.
Lake Shore shareholders will receive 0.1467 of a Tahoe share for
each share held. That represents about C$1.71 per Lake Shore share,
or a nearly 15% premium, based on closing prices Friday. Shares of
Lake Shore jumped on the news, recently trading at the offer
value.
Analysts said they believe the offer is fairly valued, partly
due to Lake Shore's geopolitically friendly and profitable
assets.
"Tahoe's bid for Lake Shore highlights the value of operating
mines in Canada where devaluation of the Canadian dollar has helped
maintain profitability in a stable political region," Mackie
Research said in a note to clients.
Lake Shore has about 463.2 million shares outstanding, giving
the offer a value about C$792 million. The deal has an implied
equity value, including convertible debentures, of C$945 million,
the companies said.
The resulting company will have no net debt and moderate capital
requirements, the companies said. Combined production in 2016 is
expected to total between 18 million and 21 million ounces of
silver and between 370,000 and 430,000 ounces of gold.
Lake Shore Chairman Alan Moon will join the merged company's
board, while Lake Shore Chief Executive Tony Makuch will become
president of Canadian operations.
Gold prices have gotten off to a strong start so far this year,
earlier Monday reaching just over $1,175 a troy ounce. Still,
that's off around 40% since its peak in 2011.
Early last year, Tahoe reached a deal to buy smaller peer Rio
Alto Mining Ltd. in a mostly stock deal to create a new,
Americas-focused precious-metals miner. Shortly after that,
Canadian mining companies Alamos Gold Inc. and AuRico Gold Inc.
agreed to merge.
Write to Judy McKinnon at judy.mckinnon@wsj.com
(END) Dow Jones Newswires
February 08, 2016 11:55 ET (16:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Grafico Azioni Lake Shore Gold Corp Ordinary Shares (Canada) (delisted) (AMEX:LSG)
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