Gran Colombia Gold (TSX: GCM) this morning announced that it has entered into an arrangement to acquire the remaining portion of Gold X Mining (TSXV: GLDX) that it doesn’t currently own. The value of the transaction is currently pegged at $315 million.
The transaction will see Gran Colombia acquire the remaining portion of the company. Prior to the announcement, the firm held an 18% stake in the junior firm. Shareholders of Gold X are set to receive 0.6948 of a Gran Colombia share for each Gold X share held, implying consideration of $4.10 per share, representing a 39% premium to the closing price of the equity on Friday.
Completion of the transaction is expected to allow for the “creation of a new, Latin American-focused growth platform,” with the combined entity having operations and assets in Colombia and Guyana. The combined firm is expected to have significant mineral reserves as well as US$100 million in cash on hand and better access to equity markets.
Under the terms of the arrangement, approval of 66 2/3% of Gold X shareholders is required, with the special meeting of shareholders currently anticipated to be held in May 2021. A termination fee of $5.5 million has also been put into place.
Gold X Mining last traded at $2.94 on the TSX Venture.
Information for this briefing was found via Sedar and Gran Colombia Gold Corp. 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.
