* Iamgold offers C$3.30/share
* Premium of 42 pct over Trelawney’s Thursday close
* Deal gives Iamgold control of C ‘t (c) Lake project in Ontario
* Move expands Iamgold base in a politically safe location
By Euan Rocha
TORONTO, April 27 (Reuters) – Canadian miner Iamgold Corp
said Friday it agreed to buy gold exploration
company Trelawney Mining for about C$585 million in
cash, in a move aimed at expanding its asset base within
politically safe jurisdictions.
Toronto-based Iamgold, whose largest operations are located
in Suriname and Burkina Faso, said the deal offers Trelawney’s
shareholders a 42 percent premium and gives it control of the
company’s attractive C ‘t (c) Lake gold project in northern Ontario.
The acquisition also allows Iamgold to effectively redeploy
cash proceeds from the sale of non-core assets into a project
that enhances its future production profile.
Last June, Iamgold sold minority interests in the Tarkwa and
Damang gold mines in Ghana to Gold Fields Ltd for $667
million in cash.
At the time, Iamgold said it intended to use the proceeds to
fund exploration and expansion work, along with “accretive
bite-sized transactions.”
“The acquisition of Trelawney creates a larger and more
geographically balanced portfolio of long-life gold assets for
Iamgold,” said Chief Executive Steve Letwin in a statement.
C ‘t (c) Lake, a large-tonnage low-to-medium-grade gold deposit,
is believed to hold about 930,000 ounces of gold in the
indicated category and 5.9 million ounces of inferred gold.
“This project has the potential to become a large bulk
tonnage operation, with significant economies of scale at
competitive cash costs,” Iamgold Chief Operating Officer Gordon
Stothart said in a statement. “I’m excited to have this asset as
part of our portfolio.”
Iamgold’s inferred resources will increase by 95 percent and
measured and indicated resources will rise by 5 percent after
the deal, the mid-tier gold miner said in its statement.
The gold miner, which has operations in North America, South
America and Africa, had production from continuing operations of
896,000 ounces in 2011.
Iamgold said the transaction has been unanimously approved
by the boards of both companies and Trelawney has advised its
shareholders to vote in favor of the deal.
Iamgold’s financial adviser on the deal was GMP Securities
and its legal adviser was Fasken Martineau DuMoulin LLP, while
RBC Capital Markets acted as Trelawney’s financial adviser and
Stikeman Elliott LLP acted as its legal adviser.
