St. Barbara Acquiring Atlantic Gold

St. Barbara Ltd. announced in mid-May it has entered into a friendly agreement to acquire Atlantic Gold Corp., which owns and operates the Moose River Consolidated gold operation in Nova Scotia, Canada. St. Barbara is an Australian company headquartered in Melbourne. It owns and operates the Gwalia gold mine in Western Australia and the Simberi gold mine in Papua New Guinea. Gwalia is scheduled to produce between 235,000 ounces (oz) and 240,000 oz and Simberi is scheduled to produce between 130,000 oz and 135,000 oz of gold during St. Barbaraís fiscal year ending June 30.

Atlantic Goldís Moose River operations include the Touquoy producing open-pit gold mine and three other pits in development: Beaver Dam, Fifteen Mile Stream and Cochrane Hill. Moose River declared commercial production from Touquoy in March 2018 and produced 91,000 oz during the year. Moose River has mineral resources of 2.4 million oz inclusive of mineral reserves of 1.9 million oz. Production is forecast to increase to more than 200,000 oz/y as the other three pits are developed.

St. Barbara will acquire 100% of all outstanding Atlantic shares at an all-cash offer price of C$2.90 per share, implying a total equity value of C$722 million and a total enterprise value of C$802 million. The transaction excludes Atlanticís 36% interest in Velocity Minerals, which will be spun out to existing Atlantic shareholders following completion of the transaction.

Atlantic Chairman and CEO Steven Dean will be invited to join the St. Barbara Board following completion of the transaction. St. Barbara is seeking to retain key Atlantic executives, who have and will continue to play roles in the successful development of Moose River. Further, St. Barbara intends to retain the current operating team, which has a track record of successful project development and operational delivery.

As featured in Womp 2019 Vol 06 -