Leagold Acquiring Brio Gold

Canadian companies Leagold Mining and Brio Gold have agreed to the acquisition of Brio by Leagold. Leagold is headquartered in Vancouver and owns and operates the Los Filos mine in Guerrero, Mexico. Brio is headquartered in Toronto and owns and operates the Pilar, Fazenda Brasileiro, and Riacho dos Machados mines and the La Luz re-development project in Brazil.

Los Filos produced 191,195 ounces (oz) of gold for Leagold in 2017, and the company is forecasting production of between 215,000 oz and 240,000 oz in 2018. Brio’s mines produced 178,000 oz in 2017 and are forecast to produce between 205,000 oz and 235,000 oz in 2018.

With the addition of production from Leagold’s Bermejal Underground project at Los Filos and Brio’s Santa Luz project, the combined operations of the two companies have the potential to produce more than 700,000 oz/y of gold by 2020 at all-in sustaining costs of about $850/oz. Total consideration to be paid by Leagold in exchange for all issued and outstanding Brio shares is valued at approximately $279 million in Leagold shares and warrants. Upon completion of the transaction, Brio shareholders will own approximately 42% of Leagold, including Yamana Gold, which will own approximately 22%. Yamana has agreed to hold the Leagold shares it receives for a minimum period of 12 months, subject to certain exceptions.

“It is envisioned that Brio’s operating procedures and reporting relationships within Brazil will be largely unaffected by the transaction,” Leagold CEO Neil Woodyer said. “To enhance this integration plan, Leagold will be pleased to welcome Brio Gold President and CEO Gil Clausen as Brio’s nominee to Leagold’s board of directors.

“We are pleased to have reached an agreement with Leagold to combine our companies to create a large midtier gold producer with peer-leading growth. “This transaction brings many nearterm and long-term benefits to Brio shareholders. In addition to the immediate and significant premium, the combined company will have a solid production platform, strong cash position and additional cash flow to fund growth. Further, the combined company will have a broadened shareholder base, a larger public float and enhanced trading liquidity. “We are confident that this combination, led by Leagold’s experienced management team, will create additional value for our shareholders going forward.”

As featured in Womp 2018 Vol 04 - www.womp-int.com