Shareholders approve Primero and Brigus merger
TORONTO (miningweekly.com) – Precious metals miners Primero Mining and Brigus Gold on Thursday announced that their respective shareholders had voted in favour of a friendly $220-million merger, that would see the two companies form a new North American midtier gold producer, with operations in Ontario and Mexico.
The acquisition was expected to close on March 5.
Brigus' main assets are the Black Fox mine and mill, and adjoining properties, Grey Fox and Pike River, in the Timmins gold district of Ontario. Canada-based Primero owns the San Dimas gold/silver mine and the Cerro del Gallo gold/silver/copper development project, both located in Mexico.
Under the terms of the deal, Brigus shareholders would receive 0.175 of a Primero common share, cash of $0.000001, and 0.1 of a common share in the capital of a newly incorporated company, Fortune Bay Corp, which would own Brigus' non-Ontario assets, for each Brigus share owned.
Last week, Canadian advisory firms Institutional Shareholder Services (ISS) and Glass Lewis & Co recommended shareholders support the merger.
In its reaction, ISS had highlighted the “sound rationale” for the arrangement and the favourable market reaction.
ISS further recommended in favour of the reduction in Brigus' stated capital, stating that "…this accounting request will not affect the value of the company or the shares, and will better reflect the company's actual capitalisation and shareholders' equity”.
The combined company was expected to produce 250 000 oz to 270 000 oz of gold-equivalent ounces in 2014, at below average cash costs. That could rise to about 400 000 oz in 2017.
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