M&As this week: Eric Sprott, Newmarket Gold, Polymetal International, Orion Minerals

7 April 2016 (Last Updated April 7th, 2016 18:30)

Eric Sprott has agreed to acquire ten million common shares of Newmarket Gold, a Canadian gold mining and exploration company, from Luxor Capital Partners and its affiliates at a price of C$2.25 ($1.72) per share for a total consideration of C$22.5m ($17.28m).

Orion

Eric Sprott has agreed to acquire ten million common shares of Newmarket Gold, a Canadian gold mining and exploration company, from Luxor Capital Partners and its affiliates at a price of C$2.25 ($1.72) per share for a total consideration of C$22.5m ($17.28m).

Following the transaction, Eric Sprott's common shares in the company will increase to 15,151,196, representing approximately 8.7% ownership in Newmarket Gold. Eric Sprott also has the option of first refusal to purchase up to an additional 16.20m common shares of Newmarket that expires on 31 December 2016.

Luxor and its affiliates, based in the US, continue to hold 50,090,697 common shares of Newmarket, representing an ownership stake of approximately 28.7%.

UK precious metals producer Polymetal International has entered a binding agreement to acquire Orion Minerals from Kazzinc, a subsidiary of Glencore, for $100m in cash. Orion and Kazzinc are both based in Kazakhstan.

Under the agreement, Kazzinc will receive a royalty linked to future production from the Komarovskoye, a low-sulphide gold deposit owned by Orion Minerals, and future gold price performance. The transaction is expected to close in 2016 and is subject to certain regulatory approvals, including approval by the Ministry of Investment and Development and anti-monopoly approval in Kazakhstan.

Scotiabank Europe is acting as financial advisor, while Morgan Stanley and RBC Europe are acting as joint corporate brokers to Polymetal. The acquisition is in line with Polymetal's processing hub strategy and provides a high-grade, open-pit with easily accessible ore feed for its Varvarinskoye Mine.


Image: Kazzinc will receive a royalty linked to future production from the Komarovskoye Gold Mine owned by Orion Minerals. Photo: courtesy: Polymetal International.