TRUE GOLD MINING TO COMBINE WITH ENDEAVOUR MINING
True Gold Mining Inc. (TGM.V) has entered into a definitive arrangement agreement with Endeavour Mining Corp., (EDV.T) pursuant to which Endeavour has agreed to acquire all of the issued and outstanding common shares of True Gold in an all-share transaction to be completed by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia). True Gold’s principal asset is the Karma mine in Burkina Faso, a low-cost, heap-leach gold mine nearing production.
This transaction allows True Gold to reach its strategic objective of becoming an intermediate gold producer. The Karma gold mine will become a cornerstone asset within Endeavour’s existing portfolio of four operating mines along with its fully permitted and construction ready Hounde project. The combined company will also benefit from having one of the largest and most prospective exploration land packages in West Africa, along with Endeavour’s operating and executive team’s significant in-country and regional experience. The combined entity will be supported by a strong balance sheet, financial flexibility, as well as a long-term strategic relationship with its 30% shareholder, La Mancha Holding S.ar.l. (“La Mancha”), enabling it to grow through development of its internal pipeline.
Under the terms of the Arrangement Agreement, all of True Gold’s issued and outstanding shares will be exchanged on the basis of 0.044 of an Endeavour common share for each True Gold common share (the “Exchange Ratio”). The share consideration represents a value of approximately C$0.57 per True Gold common share and values the Company’s total equity at approximately C$240 million on a fully diluted in-the-money basis. The share consideration represents a 43% premium based on each company’s respective closing price on March 3, 2016 and a 33% premium based on the 20-day volume-weighted average price (“VWAP”) of each company.
Concurrently, Endeavour has also announced that La Mancha has elected to exercise its pre-emptive right to maintain its 30% interest, contributing additional cash funding of approximately C$83 million in support of the combined company’s future growth, and resulting in True Gold shareholders owning approximately 22% of the combined company, on a fully-diluted in-the-money basis.
“I am very proud of what our team has accomplished at True Gold. In just over three years we have taken Karma from an unpermitted and unfunded conceptual project to a fully constructed mine, nearing production start,” stated Mark O’Dea, Executive Chairman of True Gold. “Our long term goal for the Company has been to grow the business into a significant and highly profitable producer. This transaction with Endeavour accomplishes that goal, giving our shareholders meaningful ongoing exposure to Karma as it moves into production, as well as exposure to Endeavour’s exceptional portfolio of producing mines and development projects. We are excited to become shareholders in what we consider to be the premier intermediate gold producer in West Africa.”
“This transaction offers a very meaningful share position in a proven and growing intermediate gold producer at an attractive premium,” stated Christian Milau, President & CEO of True Gold. “We are excited by the near-term growth profile and future exploration prospects of the combined company. The platform provides our shareholders with immediate exposure to production and an accelerated development strategy with a broader and more diversified asset base.”