Goldsource has closely watched Mako's successful development of the San Albino mine.
TSX-V-listed Mako Mining on Tuesday announced it would buy fellow-listed Goldsource Mines, creating a diversified gold producer with a platform for growth.
The transaction will create a company combining Mako’s Nicaraguan gold operations and mine-building team with Goldsource’s Eagle Mountain gold project, in Guyana.
“This transaction is a true ‘hand-in-glove’ partnership. The scalability of Goldsource's Eagle Mountain is a direct analogue to that of Mako's San Albino mine. Both properties have district-scale potential, with the ability to unlock that potential through cash flow,” commented Mako CEO Akiba Leisman.
“The teams have worked together as colleagues going back nearly two decades, which is expected to make integration of the two companies seamless,” he added.
Mako’s engineering and construction teams will be used to accelerate the development of Eagle Mountain, which will produce an average of 66 500 oz/y over 15 years.
The January 2024 preliminary economic assessment outlined robust economics for Eagle Mountain, with an aftertax internal rate of return of 57% and a net present value, discounted at 5%, of $292-million.
Mako’s free cash flow generation and access to capital would also help accelerate and derisk the development of the project, with the aim of reaching a production decision as soon as possible.
"Mako's successful approach to the development of the San Albino mine is something we watched closely during the 2020 to 2022 period, due in part to it being analogous to our plans for the development of Eagle Mountain, but also because we know Jesse Munoz and his construction team from prior projects that we've been involved with. This team has a solid track record and many decades of experience building mines, which is a unique offering for a junior gold producer and one that we believe is a great fit for our phased development plans at Eagle Mountain,” said Goldsource executive chairperson Eric Fier.
Upon closing of the transaction, the board of directors of Mako is expected to comprise seven members, including two nominees from Goldsource. Leisman will continue in his role as CEO of Mako, and Steve Parsons, current CEO of Goldsource, will become president of Mako.
The head office will continue to be in Vancouver.