St Barbara to acquire Canadian gold producer Atlantic Gold for $540m

St Barbara acquisition of Atlantic Gold : Australian gold mining company St Barbara has signed a deal to acquire Canadian gold producer Atlantic Gold, the owner and operator of the Moose River Consolidated project (MRC Mine) in Nova Scotia province, for CAD 722 million ($540 million).

The Australian gold mining company will acquire the Canadian gold producer through its fully-owned subsidiary Nord Pacific.

As per the terms of St Barbara acquisition of Atlantic Gold, the Australian mining company will acquire all the shares of the Canadian gold miner for CAD 2.90 ($ 2.17) in cash.

St Barbara acquisition of Atlantic Gold excludes the latter’s stake of 36% in Velocity Minerals, an eastern Europe-focused gold exploration, and development company. Atlantic Gold’s stake will be spun out to its current shareholders upon completion of the deal with St Barbara.

Image courtesy of Stuart Miles/Freedigitalphotos.net.

Steven Dean – Atlantic Gold chairman and CEO, commenting on St Barbara acquisition of Atlantic Gold, said: “St Barbara’s C$2.90 cash per share offer delivers an immediate and attractive premium to our shareholders.

“It not only recognizes the value of our current plan for the MRC Mine, but rewards shareholders for the future growth and exploration potential that defines MRC as a truly world class asset.

“In addition to the cash consideration, SpinCo provides Atlantic shareholders with ongoing exposure to the Rozino Project which we believe has strong value potential.”

Through the deal, St Barbara gets to diversify its production base thanks to the low-cost, long life mine of the Moose River Consolidated project, which is said to be located in a favorable jurisdication.

The Moose River Consolidated project began commercial production in March 2018 from the Touquoy open pit gold deposit. The Canadian gold mining project involves the development of the Beaver Dam open pit gold deposit as well, which is expected to be taken up later.

The Moose River Consolidated project contains estimated mineral resources of 2.5 Moz which includes 1.9 Moz in mineral reserves.

Commenting on St Barbara acquisition of Atlantic Gold, Bob Vassie – Managing Director and CEO of St Barbara said: “St Barbara has consistently communicated to the market that the Company has been assessing a range of inorganic growth opportunities and the acquisition today demonstrates the Company’s commitment to executing inorganic growth that is strongly aligned with St Barbara’s strategic plan.

“The addition of Moose River to the portfolio diversifies St Barbara’s production base with a low cost producing asset in a very favourable and prospective jurisdiction. It is a sustainable long life operation of scale with a low AISC position which generates impressive margins.

“The asset also has significant growth potential which St Barbara identifies as an exciting opportunity.”

St Barbara acquisition of Atlantic Gold is expected to be wrapped up in July 2019 should it satisfy customary conditions like court approvals, regulatory approvals, and Atlantic Gold shareholders’ approval.