South America-based gold miner Orosur Mining has entered into a deal to purchase Canadian mineral exploration firm Waymar Resources and merge their businesses.
The merger will create a larger South American gold exploration, development and production entity that will hold assets in Uruguay, Chile and Colombia.
As part of the deal, Orosur will buy all of the outstanding common shares of Waymar in exchange for common shares of Orosur, through an arrangement where each Waymar share will be equivalent to 0.375 of an Orosur common share.
As per the current outstanding share capital of Waymar, Orosur will issue around 18.5 million Orosur shares to purchase all of the outstanding Waymar shares.
After completion of the purchase agreement, the current shareholders of Orosur and Waymar will hold around 80.9% and 19.1% respectively, of the total issued and outstanding Orosur shares.
The transaction will also allow shareholders of both companies to participate in Waymar's 100%-owned Anzá project in Colombia, and will create a platform for further growth.
Orosur CEO Ignacio Salazar said the acquisition of Waymar, with complementary assets to Orosur, represents an excellent opportunity for shareholders, where the combination is stronger than the addition of the parts.
"The Anzá gold exploration project is an attractive, high-grade asset with significant upside, which set alongside our San Gregorio mine and Pantanillo and Anillo projects, is a major step towards the creation of a strong and diversified gold company with a well-balanced mix of existing production, exciting exploration and advanced development projects in South America," Salazar said.
Waymar CEO Pablo Marcet said the transaction will provide the necessary resources and collective expertise to realise the full potential of the Anzá project and will allow Waymar shareholders to participate in the significant growth prospects of the San Gregorio mine, as well as Orosur's attractive exploration and development projects in Chile and Uruguay.
"At a time when many companies in our sector have to resort to severely dilutive financings or face extinction altogether, Waymar shareholders will have the opportunity to become part of a stronger company that will create medium and long-term value for all shareholders," Marcet said.