Eldorado Gold to acquire Integra Gold for $590M

Eldorado Gold Corporation (TSX: ELD; NYSE: EGO) has agreed to acquire all of the issued and outstanding common shares of Integra Gold Corp. (TSX-V: ICG; OTCQX: ICGQF) for approximately CDN $590 million (all figures in Canadian dollars), inclusive of Integra shares held by Eldorado.

Eldorado owns 62,170,095 common shares in the capital of Integra, constituting 13% of the outstanding common shares of Integra on an undiluted basis.

Shareholders of Integra will be entitled to receive, at their option, for each Integra share they own either (i) 0.24250 Eldorado shares, (ii) $1.21250 in cash, in both (i) and (ii) subject to pro ration, or (iii) 0.18188 of an Eldorado share and $0.30313 in cash. The maximum number of shares issuable by Eldorado under the Arrangement will be approximately 77 million (based on the number of Integra shares outstanding less Integra shares currently owned by Eldorado). The maximum amount of cash payable by Eldorado under the Arrangement will be approximately $129 million equal to 25% of the total consideration.

Upon completion of the transaction and based on the maximum number of shares issuable under the arrangement, current Eldorado and Integra shareholders would hold approximately 90% and 10% of the combined company, respectively.

Eldorado has retained GMP Securities L.P. to act as financial advisor and Fasken Martineau DuMoulin LLP to act as legal advisor.

Integra’s exclusive financial advisor is Raymond James Ltd. Cairn Merchant Partner LP acted as a strategic advisor. BMO Capital Markets acted as exclusive financial advisor to a Special Committee of the Integra Directors.

Integra’s principal asset is the Lamaque project near Val-d’Or, Quebec. Lamaque hosts an NI 43-101 indicated resource of 5.1 million tonnes at a grade of 9.13 g/t gold and an inferred resource of 3.5 million tonnes at a grade of 7.94 g/t gold (5.0 g/t gold cut-off). A preliminary economic assessment was completed in February 2017 that envisions a high-grade underground operation producing 123,000 ounces of gold per year at all-in sustaining costs of US $634 per ounce over 10 years. Integra is currently in the process of advancing underground ramp development to facilitate underground exploration and completion of a bulk sample.

“The Company has been following Integra’s progress at Lamaque over the last 18 months and commend their team for the accomplishments to date. From previous experience of building and operating gold mines in Canada, I am excited about Eldorado’s entry into the Eastern Abitibi region of Canada. With our current balance sheet strength post the sale of our Chinese assets, this acquisition represents a use of the proceeds complementing our existing portfolio of high quality, low cost assets,” said George Burns, President & CEO of Eldorado Gold.

photo credit: Integra Gold

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.