Eldorado Gold to acquire Integra Gold

Eldorado Gold Corp. [ELD-TSX; EGO-NYSE] has entered into a definitive agreement with Integra Gold Corp. [ICG-TSXV to acquire all of the issued and outstanding common shares of Integra that it does not currently own¸.

Under the arrangement, shareholders of Integra will be entitled to receive, at their option, for each Integra share they own either (i) 0.24250 Eldorado shares, (ii) C$1.21250 in cash, in both (i) and (ii) subject to pro ration, or (iii) 0.18188 of an Eldorado share and C$0.30313 in cash.

The maximum number of shares issuable by Eldorado under the arrangement will be approximately 77 million (based on the number of Integra shares outstanding less Integra shares currently owned by Eldorado).  The maximum amount of cash payable by Eldorado under the Arrangement will be approximately C$129 million equal to 25% of the total consideration. The total transaction value is approximately C$590 million, inclusive of Integra shares held by Eldorado.

Eldorado’s offer represents:

• A value of C$1.21250 for each Integra common share based on the May 12, 2017 closing price of Eldorado common shares on the Toronto Stock Exchange
• A premium of approximately 52% to Integra’s May 12, 2017 closing price and a premium of 46% based on the volume weighted average prices (VWAP) of both companies on the TSX for the 20 day period ending May 12, 2017

Upon completion of the transaction and based on the maximum number of shares issuable under the arrangement, current Eldorado and Integra shareholders would hold approximately 90% and 10% of the combined company, respectively.

Integra’s principal asset is the Lamaque Project near Val d’Or, Quebec.  Lamaque hosts an NI 43-101 indicated resource of 5.1 million tonnes at a grade of 9.13 g/t gold and an inferred resource of 3.5 million tonnes at a grade of 7.94 g/t gold (5.0 g/t gold cut-off).  A preliminary economic assessment was completed in February 2017 that envisions a high-grade underground operation producing 123,000 ounces of gold per year at all-in sustaining costs of US $634éoz over 10 years.  Integra is currently in the process of advancing underground ramp development to facilitate underground exploration and completion of a bulk sample.

George Burns, President and CEO of Eldorado, stated, “The company has been following Integra’s progress at Lamaque over the last 18 months and commend their team for the accomplishments to date.  From previous experience of building and operating gold mines in Canada, I am excited about Eldorado’s entry into the Eastern Abitibi region of Canada. With our current balance sheet strength post the sale of our Chinese assets, this acquisition represents a use of the proceeds complementing our existing portfolio of high quality, low cost assets.”

Benefits to Eldorado’s Shareholders

• Adds a high quality development project that has the potential to add meaningful near-term production and cash flow with modest upfront capital
• Establishes an operating presence in Canada and diversifies the operating portfolio into one of the most productive mining camps in the world
• Maintains the flexibility to fund its development pipeline
• Income tax and G&A synergies with the addition of a future mining operation in Canada

Benefits to Integra’s Shareholders

• Immediate and attractive premium of approximately 52% to spot and 46% based on the 20-day VWAPs of both companies
• Exposure to Eldorado’s portfolio of high quality mines and development projects, in addition to ongoing participation in value creation at Lamaque
• Access to Eldorado’s technical, project development and operating capabilities as well as financial resources
• Potential for value accretion through a re-valuation in Eldorado’s share price as the company continues to deliver and de-risk its combined asset portfolio
• Participation in Eldorado’s dividend program

The transaction will require approval by Integra shareholders, court, stock exchange and regulatory authorities. Eldorado owns 62,170,095 common shares in the capital of Integra, constituting 13% of the outstanding common shares of Integra on an undiluted basis. Following completion of the transaction, Eldorado will own 100% of the issued and outstanding common shares of Integra.