China’s Yintai Gold revealed as acquirer of Osino in $368 million deal

Osino Resoruces Corp. [OSI-TSXV, OSIIF-OTCQX, RSR1-FSE] is set to be acquired by Chinese company Yintai Gold Co Ltd., by way of a plan of arrangement. Yintai is the company that wasn’t named when Osino announced on February 20, 2024, that it has received a proposal from a foreign mining company that it said was superior to an earlier bid from Dundee Precious Metals Inc. [DPM-TSX]. Yintai is acquiring all of Osino’s outstanding shares for $1.90 per share or $368 million.

Yintai trades on the Shenzhen Stock Exchange and has a market cap of US$5.6 billion. Its record of mergers and acquisitions includes the US$600 million acquisition of Eldorado Gold Corp.’s [ELD-TSX; EGO-NYSE] White Mountain and Tanjianshan mines and Eastern Dragon development project in 2016. Yintai is backed by Shandong Gold, which boasts a strong record of international M&A.

Osino’s key asset is a 100% interest in the advanced state, multi-million-ounce Twin Hills gold project located in Namibia. A June 2023 feasibility study completed by Osino outlined an open-pit project with a 13-year mine life and average annual production of 175,000 ounces of gold in the first five years.

With first production expected by the second half of 2026, Twin Hills has the potential to become Namibia’s third largest gold mine, said Osino President and CEO Heye Daun has said.

At closing of the Yintai arrangement, Osino’s portfolio will consist only of gold-related assets located in Namibia, primarily the Twin Hills gold project as well as exploration projects Ondundu and Eureka.

Back in December, Dundee said it had struck a deal to acquire Osino in a transaction valued at $287 million. Dundee agreed to acquire all of the issued and outstanding common shares of Osino by paying $0.775 in cash per Osino share and 0.0801 of a Dundee common share per Osino share. That implied a value of $1.55 per Osino share and a total equity value of $287 million.

Under the terms of a concurrent private placement, Dundee also agreed to purchase $10 million worth of Osino common shares in two equal tranches for $1.13 per share. This would amount to a 7.0% stake in Osino. The aim was to provide Osino with funding for project activities, including engineering, drilling and other corporate purposes.

But the superior proposal from Yintai represents a premium of 32% to the implied value of the earlier offer from Dundee. Osino President and CEO Heye Daun described Yintai as experienced, well financed and boasting a highly credible record of gold mining in China. He said the company is equipped with the technical skills and is sufficiently financed to progress the Twin Hills project through construction and into production. “We look forward to working with Yintai to continue to fast-track the development of the project and close this transaction,’’ Daun said.

The new offer contemplates that Yintai will provide Osino with a loan consisting of a US$10 million facility to enable the fast-track development of the Twin Hills gold project and to fund other liquidity needs. The offeror will also advance an amount equal to a reverse termination fee of US$9.55 million.

Osino shares advanced on the news rising 1.7% or $0.03 to $1.77 on volume of 1.48 million in early trading Monday. The shares previously traded in a 52-week range of $1.77 and 75 cents.

Osino said it has been told that Dundee Precious Metals will not amend its offer in light of the new proposal.