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Tahoe Resources To Acquire Rio Alto Mining

By Kitco News
Monday February 9, 2015 12:45 PM

(Kitco News) - Tahoe Resources Inc. (TSX:THO)(NYSE:TAHO) is set to acquire Rio Alto Mining Ltd. (TSX:RIO)(NYSE:RIOM) in a deal valued at more than C$1 billion.

The companies will combine their South American operations – Tahoe’s high-grade, low cost Escobal silver mine in Guatemala and Rio Alto’s La Arena gold mine in Peru.

Escobal produced 20.3 million ounces of silver in concentrates in 2014 and 2015 production is expected to range between 18 million and 21 million ounces of silver in concentrates.

La Arena produced a company record 222,255 ounces of gold in 2014, beating the high end of guidance estimates, which was expected to be 220,000 ounces of gold. The company expects 2015 production guidance to range between 210,000 and 220,000 ounces of gold.

Rio Alto's Shahuindo project, located in Peru, is expected to produce first gold in early 2016.

“The combination of Tahoe and Rio Alto is designed to create a stronger and better positioned company going forward,” said Kevin McArthur, vice chair and chief executive officer of Tahoe. “In addition to diversifying our asset base into one of the most attractive precious metal producing regions in the world, this transaction establishes a strong platform for future growth.”

Alex Black, president and chief executive officer of Rio Alto added that “[i]n addition to Tahoe’s attractive dividend policy, this transaction positions our shareholders to realize superior returns as we become part of a larger and more diversified intermediate precious metals producer in the Americas with enhanced cash flow generating capability.”

The deal will be put to Rio Alto shareholders, with closing of the transaction expected in early April 2015.

Tahoe’s shares were trading down on both indexes while Rio Alto’s shares were both trading up, as of 1:12 p.m. EST.

By Alex Létourneau of Kitco News aletourneau@kitco.com
Follow Alex Letourneau @alex_letourneau



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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