Primero completes Cerro takeover
TORONTO (miningweekly.com) – Canadian gold and silver producer Primero Mining this week finalised its takeover of Brisbane-based Cerro Resources for about C$119-million, giving the Joseph Conway-led company access to a highly prospective gold project, as well as other assets, in Mexico.
Cerro’s main asset is a 69% shareholding in the feasibility-stage Cerro Del Gallo project, which has one-million ounces of gold-equivalent proven and probable reserves and a further 2.3-million ounces of gold-equivalent measured and indicated resources.
Under the terms of the agreement, Primero had acquired all the issued and outstanding ordinary shares of Cerro for 0.023 of its own shares for every one Cerro share held.
A new company named Santana Minerals was created to retain Cerro’s non-Cerro del Gallo projects and interests, with existing Cerro shareholders receiving 80.1% of the ordinary shares in the new company.
Primero would provide A$4-million in funding for Santana and would receive a 19.9% stake, with antidilution rights for two years. Primero would also be entitled to appoint one director to the new company’s board, which it intended to be Conway.
The new company would be focused on unlocking the potential value at the Namiquipa silver and the Espiritu Santo gold/silver projects, also in Mexico.
"With the closing of this transaction Primero marks an important milestone on its journey to become an intermediate gold producer. This acquisition solidifies Primero's operating advantage in Mexico,” Conway said.
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