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IAMGOLD offers to buy-out remainder of EURO Ressources

IAMGOLD aims to improve the Rosebel gold mine's economics with the transaction

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EURO Ressources owns royalties over the mine's production

IAMGOLD (NYSE:IAG, TSE:IMG) has made an offer to buy-out the remainder of EURO Ressources.

It is proposed that IAMGOLD will pay €2.84 per share to take full control of the company. At that price the offer is pitched at a premium of 32% to the French company’s price on Friday.

The North American company already owns 86% of EURO Ressources, a Paris listed company which owns royalty rights to production from IAMGOLD’s 95% owned Rosebel gold mine in Suriname.

IAMGOLD, at the start of last year, deferred an expansion project at Rosebel.

The mine began production in 2004 and since then nearly 4mln ounces of produced gold has been subject to the EURO Ressources royalty arrangement. IAMGOLD highlights there could be a possible 3.1mln ounces of remaining at Rosebel

Steve Letwin, IAMGOLD chief executive, in a statement, described the offer as “attractive” in the context of volatile gold prices and the equity market environment.

“Given the pre-defined life of EURO's royalty interests, EURO shareholders have a unique opportunity to realize an above average return on their investment," Letwin said.

He added that the takeover would simplify the ownership structure of the Rosebel gold mine and would reduce the mine’s costs.

Earlier this month, IAMGOLD announced plans to reduce the Rosebel work force by 10% in order to cut costs.

Quick facts: IAMGOLD Corp

Price: 4.56 CAD

TSX:IMG
Market: TSX
Market Cap: $2.13 billion
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