GCM Mining Corp. [GCM-TSX, TPRFF-OTCQX] said Monday it has agreed to acquire all the outstanding shares of Aris Gold Corp. [ARIS-TSX, ALLXF-OTCQX] not already held by GCM. The resulting entity will be named Aris Gold Corp. and will be led by Ian Telfer as Chair and Neil Woodyer as CEO and director.
GCM already owns 60.9 million Aris Gold shares or 44.3% of the company’s issued and outstanding shares.
The transaction is expected to create a top-of-the-class company among junior producers and the largest gold company in Colombia with diversification in Guyana and Canada. Combined assets will include US$657 million in cash combined funding as well as a gold reserve of 3.8 million ounces, 18.3 million ounces of measured and indicted gold resources as well as 7.7 million ounces of inferred gold.
GCM shares advanced on the news, rising 8.5% or 30 cents to $3.70 on volume of 397,000. The shares had previously traded in a 52-week range of $6.13 and $3.13.
Aris Gold share jumped 14.5% or 24 cents to $1.89 and now trade in a 52-week range of $2.25 and $1.21.
Under the terms of the transaction, all the outstanding shares of Aris Gold not held by GCM will be exchanged at a ratio of 0.5 of a common share of GCM for each common share of Aris. The exchange ratio was determined at market, giving consideration to the 10-day and 20-day volume weighted average prices on the TSX for each of GCM and Aris Gold for the period ended July 22, 2022.
Both the GCM and Aris Gold boards of directors (other than certain interested directors) have approved the terms of the agreement. All of the directors of officers of both companies have into binding support agreements in favour of the transaction, representing 3.0% of GCM’s shares and 9.0% of the Aris shares.
It is anticipated that both GCM and Aris gold shareholder meetings will take place in mid-September, 2022 and completion is expected to occur promptly thereafter.
The combined group will have a balanced mix of production, development and exploration assets across the Americas including:
- The Segovia Operations in Antioquia, Colombia, which produced 206,389 ounces of gold in 2021.
- The Marmato Mine in Caldas Colombia, where a pre-feasibility study has disclosed estimated production of 175,000 ounces of gold annually. Marmato is a historic producing underground gold mine which is currently undergoing a modernization and expansion program.
- The Toroparu Project in Cuyuni-Mazaruni, Guyana, an advanced stage open pit and underground gold project with estimated average gold production of 225,000 ounces per year over a 24-year mine-life.
- The Soto Norte project in Santander, Colombia, which ranks of the world’s largest feasibility-stage projects with high grade mineral reserves, low capital intensity, low operating costs and district-scale potential. A feasibility study envisages average gold production of 450,000 ounces. Upon exercising its option to increase its joint venture interest from 20% to 50%, the attributable gold production to Aris would be 225,000 ounces annually.
- The Juby Project in Ontario. Juby is an advanced-stage gold project with an open pit resource located in the Abitibi Greenstone Belt.