Endeavour Mining Corporation (ASX:EVR, TSX:EDV, OTCQX: EDVMF) will acquire Avion Gold Corporation (TSX: AVR, OTCQX: AVGCF), highlighting that merger activicty in the sold-off gold sector is not just hotting up in Australia - but also in Toronto.
A definitive arrangement agreement has been entered into by the companies.
The acquisition will create one of the largest West African mining companies with three producing mines, a fourth mine currently in construction, and an attractive pipeline of exploration and resource development properties.
The gold production outcome is that Endeavour's forecast will now be 282,000 to 304,000 ounces for 2012.
Acquisition of Avion in an all share transaction with each Avion common share exchanged for 0.365 of an Endeavour common share valuing Avion at CDN$0.88 per share or CDN$389 million, using closing prices on the TSX as of August 7, 2012.
Endeavour is providing a US$20 million short term exchangeable loan to Avion to restart the Tabakoto mill capacity upgrade, leading to further gold production growth to over 450,000 ounces per year when Agbaou reaches steady state production.
Endeavour’s NI 43-101 compliant, attributable Proven and Probable gold reserves will increase by 31% to 2.8 million ounces and Measured and Indicated gold resources increase by 52% to 6.0 million ounces, and Inferred gold resources increase by 167% to 3.3 million ounces.
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