Endeavour Mining (TSX: EDV) this morning traded in its Agbaou mine in Copte d’Ivoire for cash. The company has sold the non-core mine to that of private operator Allied Gold Corp for total consideration of $80.0 million.
The sale was justified by the company as a result of their focus on high margin, long life assets. The sale took place despite the company referred to the operation as a “highly cash generative asset,” however the asset has become non-core to its operation and as a result was disposed of.
Under the terms of the arrangement, Endeavor is to receive $20 million in cash, which is to be paid in the first quarter of 2021. The company will also receive $40 million in Allied Gold shares, with the company having the option to sell the shares back to the private operator at the issue price by December 31, 2022, or earlier if the firm conducts an IPO.
A contingent payment is also applicable, valued at $20 million, which is comprised of four separate $5.0 million payments for each quarter of 2021 that the average gold price exceeds $1,900 per ounce. Finally, an NSR has been issued on the operation, based on a sliding scale, with the royalty being 2.5% if the price of gold exceeds $1,400 per ounce, while declining to 0% if gold falls below $1,000 per ounce.
The transaction is currently anticipated to close March 1, 2021.
Endeavour Mining last traded at $27.21 on the TSX.
Information for this briefing was found via Sedar and Endeavour Mining. 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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.