Tahoe buys two gold mines in Ontario: to buy Lake Shore Gold for $945 million

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Lake Shore Gold’s Timmins West mine in Timmins, Ontario. PHOTO: Gold from the shore of the lake

VANCOUVER—Two gold mines in Timmins, Ont. change hands.

Tahoe Resources Inc., headquartered in Nevada, announced it and Lake Shore Gold Corp. join forces, merging in an all-stock transaction valued at approximately $945 million, assuming conversion of convertible debentures into the money. The companies say the friendly deal will create a major precious metals producer with significant low-cost production, zero debt and operations in multiple regions of the Americas. Tahoe operates the Escobal mine in Guatemala and the La Arena and Shahuindo mines in Peru, while Lake Shore operates the Timmins West and Bell Creek mines in northern Ontario.

“The combination with Lake Shore Gold solidifies Tahoe’s position as a new precious metals leader by adding another low-cost operation in Timmins, one of the most prolific gold camps in the world,” said Kevin McArthur, President. Tahoe executive. “We are impressed with the long-term presence and see huge regional opportunities in the future.”

The all-stock deal would see Tahoe shareholders control 74% of the new company, while Lake Shore owners would own 26%. The deal offers a roughly 25% premium on Lake Shore shares over their 20-day volume-weighted average.

“The combination with Tahoe represents a unique opportunity for our shareholders to be exposed to a high-quality portfolio of long-life producing mines with significant mineral reserves,” said Tony Makuch, President and Chief Executive Officer of Lake Shore Gold. “Today’s announcement of an initial resource at our 144 Gap deposit is a perfect example of the long-term growth potential of our Timmins portfolio.

Shareholders of both companies are expected to meet to vote on the arrangement in early April. If approved, Makuch will join Tahoe as president of the company’s Canadian operations.

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