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"Global Mining Descisions in Your Palms"
| VANCOUVER, CANADA |
“We envision that this business combination will release both short and long term value through the economies of scale and synergies inherent in two large deposits located within 50km of each other. We are fortunate to have attracted such an experienced operator as Gran Colombia Gold.”
Paul Matysek |
CEO and Chairman of the Board of Directors
Gold X Corporation.
Gold X Mining Corp. yesterday announced that it has signed a definitive agreement under which it intends to complete a business combination with Gran Colombia Gold Corp. Under transaction, Gran Colombia will acquire the remaining 81% of the issued and outstanding shares of Gold X that it does not already own at a share exchange ratio of 0.500 Gran Colombia shares for each Gold X share, implying a headline value of C$3.17 per share, representing a premium of 15% to the closing price on the TSX Venture Exchange on May 8, 2020, and a premium of 41% to the volume-weighted average price of Gold X shares on the TSX Venture Exchange over the 20 trading days ending on May 8, 2020.
The Gold X transaction is also subject to the concurrent completion by Gran Colombia of its acquisition of Guyana Goldfields Inc. and other conditions customary for completion of similar transactions. Gran Colombia has submitted a proposal to Guyana Goldfields to acquire all of its issued and outstanding common shares and together with the Gold X Transaction, the combined entity will continue as Gran Colombia and will be managed by the current Gran Colombia executive team, with corporate headquarters remaining in Toronto. Shareholders of Gran Colombia will
own ~60% of the combined company, with Guyana Goldfields and Gold X shareholders owning ~25%
and ~15%, respectively, on a basic shares outstanding basis.
Paul Matysek, CEO and Chairman of the Board of Directors of Gold X stated: “We envision that this business combination will release both short and long term value through the economies of scale and synergies inherent in two large deposits located within 50km of each other. We are fortunate to have attracted such an experienced operator as Gran Colombia Gold. The management team’s success as an underground miner in Colombia as well as history developing assets within the Guiana Shield make them the ideal partner for development of the mining assets in Guyana. This deal just makes a lot of business sense on all fronts!”
Bassam Moubarak, CFO of Gold X added: “Since November of 2019, we have been working on activities that unlock the value of the Toroparu Project. Acquiring the local partner’s interest in the project earlier this year positioned us for today’s announcement which further unlocks Toroparu’s value as development and financial risk are greatly reduced given Gran Colombia’s developmental expertise and balance sheet to move this project forward.”
Gold X indicated its interest to unlock the potential synergies between its Toroparu project and Guyana Goldfields’ Aurora Project, both of which are located in close proximity to each other in western Guyana. Together with Gran Colombia’s existing mining projects and experience in Latin America, Gold X expects the combined entity will become an attractive intermediate gold producer.
Serafino Iacono, Executive Chairman of Gran Colombia, stated: “We are excited to present this opportunity to all the shareholders of Gran Colombia, Guyana Goldfields and Gold X. It is extremely rare to come across a transaction that can unlock significant tangible synergies outside of simply consolidating head offices. Not only does this transaction unlock meaningful value for all shareholders, but it creates a new Latin American gold champion with Latin American operators and mine builders. We will use our unique skillset to continue to grow Gran Colombia and create substantial value for all shareholders. We look forward in the coming weeks to present our vision to shareholders and demonstrate the superior value that our proposed merger possesses.”
Lombardo Paredes, CEO of Gran Colombia, stated: “We have studied the integration of Aurora and Toroparu and strongly believe in its potential. Based on our internal integration plan we have identified US$200 million of synergies as there are a number of different areas where Toroparu can benefit from the existing infrastructure at Aurora. This is truly a unique opportunity and I look forward to using Gran Colombia’s strong operating and mine-building team to unlock this substantial value for shareholders.”