G Mining Ventures (GMIN) and Reunion Gold (RGD) have announced a definitive agreement to merge, forming a ‘leading’ intermediate gold producer focused on the Americas.

The merger will see GMIN acquire RGD’s flagship Oko West Project in Guyana, located within the mineral-rich Guiana Shield region. Oko West is recognised as one of the most significant gold discoveries in the area.

The terms of the merger stipulate that GMIN and RGD shareholders will receive shares in a newly established company, with RGD shareholders getting 0.285 GMIN common shares for each RGD share they hold.

Additionally, RGD shareholders are set to receive shares in a new gold exploration entity (SpinCo), which will inherit all of RGD’s assets except for Oko West. GMIN has committed to funding SpinCo with $15m (C$20.56m).

The transaction values RGD shares at an estimated $0.65 each, amounting to an equity value of $638m.

This valuation marks a 29% premium over the closing prices and ten-day volume-weighted average price of GMIN and RGD shares on the TSX and TSX Venture Exchange, respectively, as of 19 April 2024, not including SpinCo’s value.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Post-transaction, GMIN and RGD shareholders will own nearly 57% and 43% of the combined entity, respectively, before a concurrent $50m equity financing. SpinCo will be 19.9% owned by the combined company and 80.1% by RGD shareholders.

GMIN plans to expedite the development of Oko West, building on RGD’s extensive exploration, development and permitting efforts.

This will be supported by the anticipated cash flow from the Tocantinzinho Gold Project, which is on track for commercial production in late 2024.

Tocantinzinho is expected to produce around 200,000 gold ounces annually for the first five years, positioning it in the lowest quartile for all-in sustaining costs.

The merger is set to result in a de-risked growth profile to fast-track Oko West’s development.

La Mancha Investments has confirmed it will exercise its anti-dilution right, subscribing for $25m in GMIN shares, potentially increasing to $35m.

It also plans to buy up to an additional $10m of GMIN shares on the open market. Franco-Nevada will match La Mancha’s $25m investment in GMIN shares on identical terms.

G Mining Ventures CEO Louis-Pierre Gignac said: “Oko West has all the key attributes GMIN is looking for in its next leg of growth.

“We are well-positioned to accelerate value creation at Oko West, leveraging our unique expertise in building and operating mines on schedule and on budget in the Guiana Shield, deep knowledge of and network in the region, and over US$480M anticipated near-term free cash flow from Tocantinzinho.

“The acquisition of Oko West is the second step towards our vision of becoming a leading intermediate gold producer, building on the team’s success at Tocantinzinho.”