Calibre Mining Corp (TSX:CXB, OTCQX:CXBMF) on Monday announced an agreement to acquire Marathon Gold Corporation in an all-stock transaction valued at approximately C$345 million.
Marathon Gold shareholders will receive 0.6164 of a Calibre common share for each Marathon share held, which implies a value of C$0.84 per Marathon common share, or a 31% premium to Friday’s closing price.
"This transformative merger creates a projected 500,000 ounce gold producer and offers our shareholders diversification and exposure to high-quality, long-life production in a tier-1 jurisdiction," Calibre Mining chairman Blayne Johnson said in a statement.
"I have no doubt that the union of Marathon's experienced team and well advanced Valentine Project based in Canada, with Calibre's production assets, robust treasury, free cash flow, flawless track record in execution and high impact exploration opportunities will unlock significant value for the shareholders of both companies," he added.
Calibre noted that Marathon Gold’s Valentine Gold Project in Newfoundland is expected to add average annual gold production of 195,000 ounces at projected All-in Sustaining Costs of US$1,007 per ounce through the first 12 years of production beginning in 2025.
It added that the combined company will have an estimated US$148 million in cash.
As well, in connection with the transaction, Calibre has agreed to purchase 66,666,667 common shares of Marathon Gold at C$0.60 per share for gross proceeds of C$40 million, which represents a 14.2% equity interest in Marathon Gold on an issued and outstanding basis.
The private placement is expected to be completed on November 14, 2023.
Contact Sean at sean@proactiveinvestors.com