TriStar Gold

Eldorado Gold to Acquire Integra Gold For CA$590 Million

VANCOUVER, May 15, 2017 /CNW/ - Eldorado Gold Corporation (the "Company" or "Eldorado") is pleased to announce that it has entered into a definitive agreement with Integra Gold Corp. ("Integra") (TSXV:ICG) (the "Arrangement Agreement"), pursuant to which Eldorado has agreed to acquire all of the issued and outstanding common shares of Integra that it does not currently own, by way of a plan of arrangement (the "Arrangement") under the Business Corporations Act (British Columbia).

Under the Arrangement, shareholders of Integra will be entitled to receive, at their option, for each Integra share they own either (i) 0.24250 Eldorado shares, (ii) C$1.21250 in cash, in both (i) and (ii) subject to pro ration, or (iii) 0.18188 of an Eldorado share and C$0.30313 in cash.  The maximum number of shares issuable by Eldorado under the Arrangement will be approximately 77 million (based on the number of Integra shares outstanding less Integra shares currently owned by Eldorado).  The maximum amount of cash payable by Eldorado under the Arrangement will be approximately C$129 million equal to 25% of the total consideration. The total transaction value is approximately C$590 million, inclusive of Integra shares held by Eldorado.

Eldorado's offer represents:

  • A value of C$1.21250 for each Integra common share based on the May 12, 2017 closing price of Eldorado common shares on the Toronto Stock Exchange
  • A premium of approximately 52% to Integra's May 12, 2017 closing price and a premium of 46% based on the volume weighted average prices ("VWAP") of both companies on the Toronto Stock Exchange for the 20 day period ending May 12, 2017

Upon completion of the transaction and based on the maximum number of shares issuable under the Arrangement, current Eldorado and Integra shareholders would hold approximately 90% and 10% of the combined Company, respectively.

Integra's principal asset is the Lamaque project near Val-d'Or, Quebec.  Lamaque hosts an NI 43-101 indicated resource of 5.1 million tonnes at a grade of 9.13 g/t gold and an inferred resource of 3.5 million tonnes at a grade of 7.94 g/t gold (5.0 g/t gold cut-off)1.  A preliminary economic assessment was completed in February 2017 that envisions a high-grade underground operation producing 123,000 ounces of gold per year at all-in sustaining costs of US$634 per ounce over 10 years2.  Integra is currently in the process of advancing underground ramp development to facilitate underground exploration and completion of a bulk sample.  

George Burns, President and Chief Executive Officer of Eldorado Gold, stated, "The Company has been following Integra's progress at Lamaque over the last 18 months and commend their team for the accomplishments to date.  From previous experience of building and operating gold mines in Canada, I am excited about Eldorado's entry into the Eastern Abitibi region of Canada. With our current balance sheet strength post the sale of our Chinese assets, this acquisition represents a use of the proceeds complementing our existing portfolio of high quality, low cost assets."

Benefits to Eldorado's Shareholders

  • Adds a high quality development project that has the potential to add meaningful near-term production and cash flow with modest upfront capital
  • Establishes an operating presence in Canada and diversifies the operating portfolio into one of the most productive mining camps in the world
  • Maintains the flexibility to fund its development pipeline
  • Income tax and G&A synergies with the addition of a future mining operation in Canada

Benefits to Integra's Shareholders

  • Immediate and attractive premium of approximately 52% to spot and 46% based on the 20-day VWAPs of both companies
  • Exposure to Eldorado's portfolio of high quality mines and development projects, in addition to ongoing participation in value creation at Lamaque
  • Access to Eldorado's technical, project development and operating capabilities as well as financial resources
  • Potential for value accretion through a re-valuation in Eldorado's share price as the Company continues to deliver and de-risk its combined asset portfolio
  • Participation in Eldorado's dividend program

Transaction Summary

The transaction will be carried out by way of a court-approved plan of arrangement and will require approval by Integra shareholders at a special meeting of Integra shareholders by:

  • at least 66⅔% of the votes cast by all the shareholders of Integra; and
  • a simple majority of the votes cast by the shareholders of Integra, excluding votes from certain shareholders, including Eldorado, as required under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.

In addition to shareholder approval by Integra shareholders, the Arrangement is also subject to the receipt of certain regulatory, court and stock exchange approvals, and other closing conditions customary in transactions of this nature.  It is anticipated that the special meeting of Integra shareholders will be held in July 2017.

The Arrangement Agreement includes customary provisions, including non-solicitation of alternative transactions, a right to match superior proposals in favor of Eldorado and fiduciary-out provisions.  Integra has agreed to pay a termination fee of approximately C$18 million to Eldorado upon the occurrence of certain termination events. 

Both companies' Boards of Directors have determined that the proposed transaction is fair to their respective shareholders and in the best interests of their respective companies based on a number of factors, including fairness opinions received from their respective financial advisors.  Each company's Board of Directors approved the terms of the proposed Arrangement and the Integra Board of Directors unanimously recommends that its shareholders vote in favour of the transaction.  GMP Securities L.P. has provided a fairness opinion to the Board of Directors of Eldorado, Raymond James Ltd. has provided a fairness opinion to the Board of Directors of Integra and BMO Nesbitt Burns has provided a fairness opinion to the Special Committee of Integra.  Each of the directors and senior officers of Integra have agreed to vote in favour of the transaction.

Full details of the proposed transaction will be included in the management information circular to be mailed to Integra shareholders in June 2017.

Eldorado owns 62,170,095 common shares in the capital of Integra, constituting 13% of the outstanding common shares of Integra on an undiluted basis. Following completion of the transaction, Eldorado will own 100% of the issued and outstanding common shares of Integra.  To obtain a copy of the Early Warning Report to be filed by Eldorado in connection with the transactions contemplated by the Arrangement Agreement, please contact Krista Muhr at 1188 - 550 Burrard Street, Vancouver, B.C. V6C 2B5, (tel: 604 687 4018).

Advisors and Counsel

Eldorado has retained GMP Securities L.P. to act as financial advisor and Fasken Martineau DuMoulin LLP to act as legal advisor.

Integra shareholders and other interested parties are advised to read the materials relating to the proposed transaction that will be filed by Integra with securities regulatory authorities in Canada when they become available as they will contain important information. Anyone may obtain copies of these documents when available, free of charge at This announcement is for informational purposes only and does not constitute an offer to purchase, a solicitation of an offer to sell the shares or solicitation of a proxy.

Scientific and Technical Disclosure

The scientific and technical information contained in this news release specific to the Lamaque Project has been reviewed and approved by Hervé Thiboutot, Eng., Senior Vice-President of Integra Gold Corp., who is an independent qualified person under National Instrument 43-101 ("NI 43-101").

1) Readers should refer to Integra's press release and Technical Report entitled "NI 43-101 Technical Report on the Spring 2017 Mineral Resource Estimate Update for the Lamaque Project" dated May 5, 2017 for further information on the gold mineral resource estimates contained in this press release, with an effective date of March 22, 2017, and to Integra's press release dated April 13, 2017 and Technical Report entitled "NI 43-101 Preliminary Economic Assessment Update for the Lamaque Project" with an effective date of February 27, 2017 for further information on Integra's preliminary economic assessment.

2) Mineral resources are not mineral reserves and do not have demonstrated economic viability. Integra's preliminary economic assessment is preliminary in nature, and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized.

About Eldorado

Eldorado is a leading low cost gold producer with mining, development and exploration operations in Turkey, Greece, Serbia, Romania and Brazil.  The Company's success to date is based on a low cost strategy, a highly skilled and dedicated workforce, safe and responsible operations, and long-term partnerships with the communities where it operates.  Eldorado's common shares trade on the Toronto Stock Exchange (TSX: ELD) and the New York Stock Exchange (NYSE: EGO).


Sign Up To Receive All Morning
News To Your Email Inbox

Please review our Disclaimer and Privacy Policy before subscribing.

Balmoral Resources

Balmoral Resources

Balmoral Resources is a multi-award winning Canadian-focused exploration company actively exploring a portfolio of gold and base metal properties located within the prolific Abitibi greenstone belt in West-central Quebec, Canada. Balmoral's flagship 1,000 km2 Detour Gold Trend Project hosts the resource-stage Martiniere gold and Grasset nickel deposits. Employing a drill-focused exploration style in one of the world’s preeminent mining jurisdictions... LEARN MORE

No Internet Connection