St. Barbara Acquires Atlantic Gold in US$536 Million Takeover

Australian miner St. Barbara has made a US$536 million bid to acquire BC-based Atlantic Gold in the latest M&A move in the gold space.

Australian gold miner St. Barbara (ASX:SBM,OTC Pink:STBMY) has begun the process of acquiring Canadian-owned Atlantic Gold (TSXV:AGB,OTC Pink:SPVEF) in a plan of arrangement worth US$536 million, the companies announced on Wednesday (May 15).

As per the agreement, St. Barbara will offer C$2.90 per share, which represents a 39 percent premium to Atlantic Gold’s closing price on Tuesday (May 14). Analysts are touting the deal as a move that could lead to growth options, but may also create challenges for St. Barbara.

“Buying an unknown asset in a new country which itself potentially requires a fresh injection of capital … could present an additional barrier for some investors,” RBC Capital told Reuters.

By purchasing the Canadian miner, St. Barbara will be adding Moose River Consolidated, which is owned and operated by Atlantic Gold, to its portfolio.

“The addition of Moose River to the portfolio diversifies St Barbara’s production base with a low cost producing asset in a very favourable and prospective jurisdiction. It is a sustainable long life operation of scale with a low [all-in sustaining cost] AISC position which generates impressive margins,” said Bob Vassie, managing director and CEO of St. Barbara.

The bid already has the backing of Atlantic Gold’s board and comes on the heels of fellow Australian gold miner, Newcrest Mining (ASX:NCM,OTC Pink:NCMGF), purchasing a copper and gold mine from BC-based Imperial Metals (TSX:III,OTC Pink:IPMLF) for US$806.5 million in March.

Gold is up close to 9 percent year-on-year in Australian dollars, while gold priced in US dollars remains relatively flat. Those circumstances have put mergers and acquisitions (M&A) in the focus for Australian companies focused on the yellow metal.

In fact, many market watchers have already named Evolution Mining (ASX:EVN,OTC Pink:CAHPF) and Northern Star Resources (ASX:NST,OTC Pink:NESRF) as companies that will more than likely join in on the M&A activity that has been growing within the gold space.

“The high AU gold price has benefited Aussie gold miners but they have also done very well operationally,” said UBS (NYSE:UBS) analyst Dan Morgan. He added, “In aggregate they have focused on cashflow which investors have liked.”

In terms of the deal itself, Atlantic Gold says the offer will deliver an attractive premium to shareholders and that executives of the miner, who control 32 percent of shares, have already backed the bid.

“(The deal) not only recognizes the value of our current plan for the MRC mine, but rewards shareholders for the future growth and exploration potential that defines MRC as a truly world class asset,” stated Steven Dean, chairman and CEO of Atlantic Gold.

Dean will be invited to join St. Barbara’s board and the company’s operating team will be retained.

Both companies anticipate that the deal will close sometime in July of this year.

As of 3:15 p.m. EDT on Wednesday, St. Barbara was trading at AU$3.32; meanwhile Atlantic Gold surged 37.56 percent to trade at C$2.88.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.

Torian Resources Limited Significant Gold Results from Surface at Mt Stirling

Perth, Australia (ABN Newswire) – Torian Resources Ltd (ASX:TNR) is pleased to advise that recent drilling results continue to extend the Mt Stirling Gold System over ~1.1km of Strike, ~300m at depth, and it remains open in multiple directions.


– The interpreted strike of the Mt Stirling gold system exceeds 1.160km with Mt Stirling Main Zone; Hanging Wall and Viserion lodes all remaining open along strike and down-dip.

Keep reading... Show less

eMetals Limited Updates Shareholders On Exploration – April 12, 2021

eMetals Limited (ASX:EMT) (eMetals or Company) is pleased to update shareholders on exploration activities which have commenced across the Company’s projects.


Keep reading... Show less

Discovery Harbour Provides Newcrest’s Planned Program for Fortuity 89, Nevada

Discovery Harbour Resources Corp. (TSXV: DHR) (OTC Pink: DCHRF) (FSE: 4GW) (the “Company” or “Discovery Harbour”) is pleased to announce that Newcrest Resources Inc., a wholly owned subsidiary of Newcrest Mining Limited (“Newcrest”), has provided the details of its planned program for the Fortuity 89 epithermal gold property in Nevada.

The Fortuity 89 property covers very limited outcrop surrounded by a large covered area. The outcrop and interpreted geology are prospective for concealed low sulphidation epithermal gold mineralization below shallow unconsolidated alluvial gravels. Newcrest’s planned activities include a geophysical program encompassing a 675 line kilometre drone airborne magnetic survey, a 250 station ground gravity survey and a 45 line kilometre audio band magnetotellurics (AMT) resistivity survey. It is intended that geologic and alteration sampling and mapping will also be undertaken with a soil geochemical sampling program. The intended outcome of this program is to identify potential drill targets for testing this calendar year.

Keep reading... Show less

Blackdome-Elizabeth Gold Project 2021 Exploration Plan and Update

Tempus Resources Ltd. (“Tempus” or “the Company”) (ASX:TMR)(TSXV:TMRR) is pleased to provide an update on the exploration plan for the upcoming field season at the Blackdome-Elizabeth Gold Project, located in British Columbia, Canada

The 2021 exploration program at Elizabeth and Blackdome is fully permitted and on schedule to commence at the end of Q2, 2021. The program will consist of 7,500 metres of down plunge and along strike diamond drilling at Elizabeth to expand the known gold mineralisation, in parallel with detailed alteration and mapping studies at Blackdome in support of future resource expansion drilling.

Keep reading... Show less

Rio Tinto reaches agreement with Turquoise Hill Resources on financing plan for Oyu Tolgoi

Rio Tinto has entered into a binding Heads of Agreement (HoA) with Turquoise Hill Resources (TRQ) for an updated funding plan (the “Funding Plan”) for the completion of the Oyu Tolgoi (OT) Underground Project in Mongolia. The Funding Plan addresses the estimated remaining known funding requirement of approximately $2.3 billion 1 , building on and replacing the arrangements established in the Memorandum of Understanding that Rio Tinto and TRQ previously entered into on 9 September, 2020.

Under the HoA, subject to securing approval by OT LLC and any required support from the Government of Mongolia, and subject to timing, availability, and terms and conditions being acceptable to both parties, Rio Tinto and TRQ will:

Keep reading... Show less

Top News

Related News