Dundee Precious Metals (DPM) has signed a definitive agreement to acquire all of the issued and outstanding shares it does not currently own in INV Metals.
As part of the transaction, DPM will buy each of these issued and outstanding common shares of INV Metals for 0.0910 of a DPM common share.
On a 100% and fully diluted basis, the transaction’s implied equity value is equal to approximately $109m (C$132m) and $86.14m (C$104m) for the portion that DPM does not own.
INV Metals owns the Loma Larga gold-copper-silver project in southern Ecuador. The project is well-aligned with DPM’s core strengths and capabilities and will benefit from additional engagement with local stakeholders.
It also adds high-quality growth asset to DPM’s portfolio and has the potential to produce an annual average of nearly 200,000 gold ounces (Au oz) in its first five years.
Loma Larga’s annual life of mine production is estimated to be approximately 170,000 Au oz.
At this project, DPM intends to explore further optimisation studies and will continue to advance the permitting process.
DPM president and CEO David Rae said: “Loma Larga adds a high-quality, advanced stage gold project to our portfolio that has the potential to generate meaningful production growth and significant value for our stakeholders.”
“Our approach to advancing Loma Larga will benefit from our firm commitment to the highest standards for engagement with local communities and environmental stewardship, in addition to our development and operating experience to further unlock the significant potential of the project.”
INV Metals’ largest shareholder IAMGOLD is supporting the deal.
The transaction is subject to shareholder and court approvals, applicable regulatory approvals, including, but not limited to, TSX approval, among others.
It is expected to close shortly after the shareholder meeting, which will be held next month.
Upon conclusion, existing shareholders of DPM and INV Metals will respectively own approximately 94.5% and 5.5% of the pro forma company.