Gran Colombia acquires Gold X, creates mid-tier Latin American-focused gold producer
(Kitco News) - Gran Colombia Gold (TSX: GCM; OTCQX: TPRFF) and Gold X Mining (TSXV: GLDX; OTCQX: GLDXF) announced today that they have entered into a definitive arrangement agreement dated March 14, 2021 pursuant to which Gran Colombia will acquire all of the issued and outstanding common shares of Gold X not already owned by Gran Colombia by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia). Gran Colombia currently owns 9,571,158 shares of Gold X, or approximately 18% of the Gold X shares outstanding.
Under the terms of the agreement, all of the issued and outstanding Gold X shares will be acquired by Gran Colombia in exchange for Gran Colombia common shares on the basis of 0.6948 of a Gran Colombia share for each Gold X share.
The exchange ratio implies total consideration of approximately CA$315 million on a 100% and fully diluted in-the-money basis. The exchange ratio represents a premium of 39% based on the closing price of the Gold X shares on the TSX Venture Exchange on the value date and a 44% premium based on the 20-day volume weighted average price of the Gold X shares ending on the value date.
According to the statement, the combined company will consist of a complementary asset portfolio including the world-class, free cash flow generating Segovia operations located in Colombia, as well as the large, high-growth and substantially de-risked Toroparu gold project in Guyana that boasts 4.5 million ounces of LOM gold production over a 24-year mine life.
The combined company will have approximately US$100 million in cash, greater access to equity and debt capital markets, financing support from Wheaton Precious Metals as well as robust free cash flow from Gran Colombia’s Segovia operations.