Gran Colombia Gold Corp. (TSX:GCM) has made an unsolicited offer for Guyana Goldfields Inc. (TSX:GUY) that it says is superior to that of Silvercorp
SmallCapPower | May 12, 2020: Gran Colombia Gold Corp. (TSX:GCM) announced on Monday that it will acquire the remaining 81% of the issued and outstanding shares of Gold X Mining Corp. (TSXV:GLDX) that it doesn`t already own and has made an unsolicited offer to acquire Guyana Goldfields Inc. (TSX:GUY) as well. Under Gran Colombia`s proposal, Guyana Goldfields investors will receive 0.142 of a Gran Colombia share for each Guyana Goldfields share held, which GCM claims is an ~50% premium to the offer currently on the table from Silvercorp. Gold X Mining shareholders will receive 0.5 of a Gran Colombia share for each Gold X share held.
Gran Colombia Gold said the three-way merger will create a Latin American-focused intermediate gold producer with pro-forma 2020 production of 275,000 gold ounces and anticipated production growth to more than 500,000 ounces per year. The combined company will have more than US$100 million in cash. Wheaton Precious Metals will also provide financing support to fund development.
Guyana Goldfields has struggled with its operations in Guyana and Gran Colombia believes the combination of Gold X`s Toroparu project has the potential to unlock savings of about US$200 million. According to a Preliminary Economic Assessment study dated July 2019, the Toroparu Gold Project in Guyana has a gold resource of 5.02 million ounces that has the potential to produce 188,000 ounces of gold per year over a 24-year mine life.
Guyana Goldfields shares jumped 14% to $0.80 on Monday, while Gran Colombia Gold stock dropped 13% to $5.52 and shares of Gold X Mining ended down 6% to $2.60.
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