Fortuna launches C$129m bid for Goldrock Mines
TORONTO (miningweekly.com) – The TSX-V-listed stock of Goldrock Mines on Wednesday spiked 60% after NYSE- and TSX-listed Fortuna Silver Mines late on Tuesday announced that it had signed a C$129-million definitive agreement to buy Goldrock through a plan of arrangement, which could boost the company's precious-metals equivalent reserve base by 200%.
Under the terms of the deal, each common share of Goldrock would be exchanged for 0.1331 of a Fortuna common share, or about of C$1.08 a Goldrock share.
Upon closing, each outstanding warrant to purchase a Goldrock share would convert to a right to receive 0.1331 of a Fortuna share. All options to buy a Goldrock share were in-the-money and would be exercised on or before completion of the arrangement.
Goldrock's main asset was the fully owned Lindero silver project, located in Salta province, Argentina. The project was an openpit, heap-leach gold project, with a recently completed feasibility study. Lindero had been granted an environmental permit necessary for development to start.
Fortuna advised that it would be focused on bringing the Lindero project into production by 2018.
The project could potentially produce about 26.5-million ounces of silver equivalent (or about 346 000 oz of gold equivalent) a year from 2018 onwards. Pro forma all-in sustaining costs had been estimated to be less than $10/oz silver equivalent.
Fortuna’s main assets comprised the operating Caylloma silver mine, in southern Peru, and the San Jose silver/gold mine, in Mexico.
Goldrock’s stock on Wednesday soared as high as C$1.07 apiece, while the TSX-listed stock of Fortuna fell 6% to C$7.59 each.
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