Avion Gold (AVR.TSX) announced that it has agreed to sell itself to Endeavour Mining (EDV.TSX) in a transaction valued at approximately C$389 million. The deal marks the latest $100 million-plus acquisition in the mining sectorand one of the most noteworthy following Yamana Gold’s (AUY) C$410 million deal for Extorre Gold Mines (XG), announced in June.
In Endeavour’s all-stock bid for Avion, it is offering 0.365 share of Endeavour for each Avion share – which based on Endeavour’s closing price yesterday of C$2.40, represents a 56.4% premium, or C$0.88 per share for Avion. However, due in large part to the fact that shares of EDV.TSX have tumbled by C$0.40, or 16.7%, to C$2.00 this afternoon, shares of AVR.TSX are up by only C$0.13, or 23.2%, at C$0.69.
Endeavour noted that the acquisition will raise its gold production by 50% this year, to between 282,000 and 304,000 ounces. The deal is expected to close in October of this year and is subject to shareholder approval.
Avion Gold controls 80% of the Tabakoto and Segala gold projects in Mali, West Africa. Endeavour Mining owns gold mines in Ghana and Burkina Faso and has an interest in the Agbaou Gold Project in Côte d’Ivoire.
Prior to the deal’s announcement yesterday, GoldAlert Pro had Avion Gold (AVR.TSX) ranked 13th out of the 95 stocks included in its rankings. To see the complete rankings of GDX and GDXJ components, visit http://pro.goldalert.com
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