Anaconda Mining has entered a definitive arrangement agreement to acquire all issued and outstanding common shares of Orex Exploration through a court-approved arrangement, improving the acquiring company's asset portfolio in Canada.
Under the agreement, Orex shareholders will receive 0.85 common Anaconda Mining share for each common share of Orex.
After completion of this transaction, Orex will become a wholly owned subsidiary of Anaconda Mining, subject to customary closing conditions.
Existing Anaconda and Orex shareholders will own 54.9% and 45.1% respective interests of the combined company on a nondiluted basis.
The deal is expected to accelerate development of Orex’s Goldboro Project, which can access Anaconda Mining’s infrastructure at the Point Rousse Project and its management team.
Using Anaconda Mining’s existing port, mill and tailings facilities will also help reduce operating costs at Goldboro substantially.
The combined entity is expected to have greater market presence with a broader capital markets profile.
Anaconda Mining president and CEO Dustin Angelo said: “We believe that the arrangement with Orex is a great opportunity for our shareholders and we are acquiring mineral resources at an attractive price.
“Over the last nearly seven years, we have built a scalable platform for growth with an ever-improving mill facility, plenty of tailings capacity and a new port facility. We have a track record of success, developing and operating gold mining projects.
“The Goldboro Project provides the mineral resources to extend the longevity of Anaconda and potentially increase annual production to much higher levels. We are excited to leverage our people, talents and Point Rousse infrastructure to meet our goal of bringing the Goldboro Project into production as soon as reasonably possible.”
The board of directors of both the companies has approved the transaction.
Approvals are currently pending from shareholders and customary regulatory bodies, including Toronto Stock Exchange and TSX Venture Exchange.
The arrangement is expected to close in May this year.
A gold mining and exploration company, Anaconda Mining owns Point Rousse Project with three exploration/development projects called the Viking and Great Northern Projects and the Tilt Cove Property in Newfoundland, Canada.
Image: Anaconda Mining's Viking Project. Photo: courtesy of Anaconda Mining.