TORONTO (miningweekly.com) – Junior gold producer Anaconda Mining has agreed to buy Orex Exploration through a court-approved plan of arrangement, giving Anaconda access to another high-grade gold deposit in Maritime Canada.
Combining the two companies will create a single enterprise with expanded mineral resources, most of which are high grade. Anaconda will gain access to Orex’s Goldboro project, in Nova Scotia, which has 457 400 oz gold in the measured and indicated categories and 372 900 oz inferred.
Anaconda is offering Orex shareholders 0.85 of an Anaconda share for each Orex share held. Following completion of the arrangement, Orex will be a wholly owned subsidiary of Anaconda. Existing Anaconda and Orex shareholders will own about 54.9% and 45.1% of the combined company, respectively, on a nondiluted basis.
Anaconda believes that with its flagship Point Rousse project, in Newfoundland and Labrador, which has been producing gold for nearly seven years, and having incrementally improved its operating infrastructure during that time, which includes building a 1 300 t/d mill, tailings capacity for about 15 years (based on the current mill throughput rate) and a port facility, it will be able to accelerate the development of the Goldboro project at a lower capital cost than if it were a standalone project.
"We believe the arrangement with Orex is a great opportunity for our shareholders and we are acquiring mineral resources at an attractive price. Over the last nearly seven years, we have built a scalable platform for growth with an ever-improving mill facility, plenty of tailings capacity and a new port facility.
“We have a record of success, developing and operating gold mining projects. The Goldboro project provides the mineral resources to extend the longevity of Anaconda and potentially increase annual production to much higher levels. We are excited to leverage our people, talents and Point Rousse infrastructure to meet our goal of bringing the Goldboro project into production as soon as reasonably possible,” Anaconda president and CEO Dustin Angelo stated.
Both Anaconda and Orex's boards have unanimously approved the deal. Pending shareholder voting and regulatory approvals, the arrangement is expected to close in May.
Anaconda’s portfolio also comprises the Point Rousse project, where it has established gold resources of 107 230 oz in the indicated category and 37 030 oz inferred; and the Viking project, also in Newfoundland and Labrador, which holds 83 000 oz gold in the indicated category and 31 000 oz inferred.