15/05/2019 - 15:28

St Barbara acquires Atlantic Gold

15/05/2019 - 15:28

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Gold producer St Barbara has agreed to acquire 100 per cent of Canadian miner Atlantic Gold Corporation for $768 million.

St Barbara acquires Atlantic Gold
St Barbara also owns the Leonora operations in Western Australia. Photo: Attila Csaszar

Gold producer St Barbara has agreed to acquire 100 per cent of Canadian miner Atlantic Gold Corporation for $768 million.

Atlantic is a TSX-listed low-cost gold producer which owns and operates Moose River Consolidated in Nova Scotia in Canada.

Moose River, comprising of one producing open-pit and three others in development, declared commercial production in 2018 and produced 91 koz in the 2018 calendar year, with planned expansion of production to more than 200 koz as the other three pits are developed.

St Barbara will acquire 100 per cent of Atlantic shares at C$2.90 (A$3.11) each.

Atlantic’s directors control 32 per cent of the register and have entered a lock-up agreement to vote all shares they hold in favour of the transaction.

St Barbara intends to raise approximately $490 million through an underwritten entitlement offer to partly fund the transaction with the rest backed by St Barbara’s existing cash reserves.

In a statement, St Barbara said Atlantic chairman and chief executive Steven Dean will be invited to join its board.

St Barbara managing director and chief executive Bob Vassie said the addition of Moose River to the portfolio diversified St Barbara’s production base with a low cost producing asset in a very favourable and prospective junction.

“It is a sustainable long life operation of scale with a low AISC position which generates impressive margins,” Mr Vassie said.

“The asset also has significant growth potential which St Barbara identifies as an exciting opportunity.”

St Barbara’s existing assets include the Leonora operations in Western Australia and the Simberi Operations in Papua New Guinea.

 

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