Leagold Mining Corporation (TSX-V: LMC) has completed the acquisition of the Los Filos Gold Mine in Guerrero State, Mexico for US $350 million (all figures in US dollars) from Goldcorp Inc. (TSX: G; NYSE: GG).
The purchase price consisted of $279 million in cash and $71 million in common shares of Leagold. Russell Ball, Goldcorp’s EVP Corporate Development and CFO, has joined Leagold’s board of directors as Goldcorp’s nominee.
The acquisition was financed by a $133 million (CDN $179 million) Subscription Receipt Offering completed on March 8, 2017, a $150 million Loan Facility and $50 million Equity Private Placement being provided by Orion Mine Finance Fund II LP managed by Orion Resource Partners.
The Mexican anti-trust commission (COFECE) has approved the acquisition, but requires a second COFECE application with respect to a portion of Orion’s $50 million equity investment. Orion’s $50 million has been split into a $21 million private placement and a $29 million subscription receipt financing, with each subscription receipt converting into one common share, without payment of additional consideration or further action, upon receipt of the second COFECE approval.
Following the closing of second COFECE financing, Leagold will have 151.3 million outstanding shares with principal ownership as follows: Goldcorp (34.6M shares, 22.9%), Orion (24.4M shares, 16.1%), Neil Woodyer, CEO & Director (7.6M shares, 5.0%), Frank Giustra, Chairman (5M shares, 3.3%).
The Subscription Receipt financing was led by BMO Capital Markets and UBS Securities Canada Inc. and included Scotia Capital Inc., Canaccord Genuity Corp., GMP Securities L.P. and TD Securities Inc.. UBS Securities Canada Inc. is also acting as financial adviser to Leagold in connection with Orion’s loan facility and equity subscription transactions. BMO Capital Markets and UBS Securities Canada Inc. are acting as agents and joint bookrunners on the private placement to Orion.
Fasken Martineau DuMoulin LLP and Blake, Cassels & Graydon LLP acted as legal counsel to Leagold and the underwriters.
McCarthy Tétrault LLP acted as legal advisor and Scotia Capital acted as financial advisor to Goldcorp.
photo credit: Goldcorp