Orezone-IAMGOLD deal gets early supportOrezone-IAMGOLD deal gets early support from shareholders By Krystle Chow, Ottawa Business Journal Staff
Fri, Feb 13, 2009 9:00 AM EST
Almost half of Orezone Resources Inc. (TSX:OZN)'s shareholders have approved the sale of its main Burkina Faso mine to Toronto's IAMGOLD Corp.
Ottawa-based Orezone said as of Feb. 11, proxies representing 41.63 per cent of its outstanding shares had been deposited, of which 99.9 per cent had been voted in favour of the arrangement, which would see Orezone shareholders getting eight per cent of a common share of IAMGOLD (TSX:IMG), plus 0.125 common shares of a new spinoff company named Orezone Gold Corp.
The votes were dropped off ahead of a special shareholders' meeting to be held on Feb. 18 in Toronto.
Shares of IAMGOLD fell by 2.6 per cent Thursday to close at $9.60 on the Toronto Stock Exchange, while Orezone's stock gained two cents to close at 82 cents. Both stocks have skyrocketed since the deal was first announced in December, when IAMGOLD's shares were worth a little more than $6 and Orezone's were priced at roughly 50 cents each following a one-day tripling from just 18 cents the day before news of the transaction broke.
At the time, the deal was worth about US$139 million, but at current prices it's closer to $271 million.
Orezone said IAMGOLD has also agreed to invest up to C$7 million in the Orezone subsidiary that currently holds the rights to the Essakane Project in Burkina Faso, in exchange for a maximum two-per-cent interest in the subsidiary. The funds will be used to fund Essakane until the takeover deal goes through.
If the buyout isn't completed, the companies noted, IAMGOLD has the right the put the purchased shares back to Orezone, and the latter will have to pay back the invested amount either in cash or in shares.
That amount is on top of the funds raised in a $20-million private placement financing, which raised IAMGOLD's stake to in Orezone to 16.6 per cent, but the shares the former got through the placement won't entitle it to more voting rights at the shareholder meeting.
The companies earlier said Orezone would still be able to use the private placement funds even if the takeover doesn't materialize.
The deal with IAMGOLD is now expected to close on Feb. 25, Orezone said.
Shares of Orezone opened a penny higher on Friday, at 83 cents, but fell to 79 cents at 11:36 a.m.