Global gold miner AngloGold Ashanti has entered into a definitive arrangement agreement to acquire the remaining 80.5% interest in TSX-listed Corvus Gold that it does not already own at C$4.10 a common share in cash.
The transaction is valued at about $370-million and implies a total equity value for all Corvus common shares and outstanding options to acquire common shares of about C$570-million, or $450-million.
Corvus owns the North Bullfrog, Mother Lode and other exploration assets located in Nevada’s Beatty district, where AngloGold Ashanti holds several exploration assets (Silicon, Merlin, Transvaal and Rhyolite) and has been conducting exploration activities for four years.
Placing these assets under single ownership would allow for significantly reduced capital intensity to develop the district with a phased and modular approach, providing for a meaningful, low-cost production base in the medium and longer term, AngloGold CEO Alberto Calderon said on Monday.
"This transaction delivers a compelling, district-wide consolidation in Nevada, which allows for the Beatty district to become a potential Tier 1 asset for AngloGold Ashanti. The inclusion of these assets in our portfolio will enable AngloGold Ashanti to have first production in North America in the next three to four years, further improving the overall geographic balance of our portfolio," he said in a media statement.
AngloGold Ashanti’s conceptual development plan for the district envisions North Bullfrog being developed first, with production in the next three to four years, followed by Silicon, Merlin (including Lynnda Strip) and Mother Lode.
The group would release more details about its integrated development plan for the Beatty district next year, the bullion major stated.
Meanwhile, Corvus president and CEO Jeffrey Pontius said that the proposed all-cash offer provided a compelling opportunity for Corvus shareholders to realise significant value and that it would eliminate exposure to future capital requirements to fund construction of Corvus’ projects.
"AngloGold Ashanti has been a supportive shareholder of Corvus since its inception and has supported us in our capital raising needs along the way. AngloGold Ashanti’s long history of successful and responsible exploration, discovery, mine building and operating expertise will be a significant benefit to the region and all of its stakeholders.”
The all-cash consideration of C$4.10 a share represents a premium of about 26% to the closing price of Corvus common shares on the TSX on July 12, 2021, the day prior to the announcement that AngloGold Ashanti submitted a non-binding proposal to Corvus, and a premium of about 59% to the closing price of Corvus common shares on the TSX on May 5, 2021, the day prior to the announcement of the loan agreement and exclusivity.
Corvus' stock traded at C$4.04 a share on Monday morning.