M&A activity in the mining sector continues to grow, with Aura Minerals (TSX: ORA) this morning announcing an agreement to acquire Bluestone Resources (TSXV: BSR) in a cash and stock transaction.
The arrangement will see Bluestone shareholders receive total compensation valued at $0.50 per share, which represents a 51% premium to Friday’s close. The figure is said to represent a total enterprise value of US$74.3 million for Bluestone.
Consideration under the transaction is to consist of a cash payment of $0.287 per share or 0.0179 of an Aura common share, subject to proration, or a combination of both. In addition, shareholders will receive a contingent value right, or CVR, valued at $0.212, which is to be paid in three equal annual installments upon Bluestone’s Cerro Blanco gold project achieving commercial production.
WATCH: $200M Cash, 8.8% Dividend Yield w/ 450K oz Gold Target | Aura Minerals with Rodrigo Barbosa
The focus of the transaction is Bluestone’s Cerro Blanco project in Guatemala. The project currently boasts measured and indicated resources of 3.1 million gold ounces at 1.5 g/t, while a feasibility study has outlined a $1.05 billion net present value (5% discount) on the project, based on a 14 year mine life, which would see average gold production of 241,000 ounces per year of gold and 923,000 ounces per year of silver. The project however is subject to social hurdles, with environmental groups currently challenging the approval procedure that approved the surface mining method at the project.
“Cerro Blanco stands as a world-class deposit that has encountered both social and institutional hurdles. We are confident that, along the next few years, by integrating it with Aura’s 360 vision, we can refine our strategic approach to make Cerro Blanco another flagship project that exemplifies the utmost respect for social and environmental responsibilities while delivering value to all stakeholders,” commented Aura CEO Rodrigo Barbosa.
The transaction remains subject to shareholder and customary regulatory approvals. A termination fee of US$2.0 million is also in play.
Closing of the transaction is expected to occur in January 2025.
Bluestone Resources last traded at $0.33 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
