In breaking news Thursday, IAMGOLD Corporation (TSX: T.IMG, Stock Forum) and Orezone Resources (TSX:T.OZN, Stock Forum) announced that they have entered into an agreement for IAMGOLD to acquire, via a plan of arrangement, all of the outstanding common shares of Orezone.
The all-stock transaction is valued at approximately US$139 million.
As part of the agreement, IAMGOLD will acquire and finance development of the Essakane gold project in Burkina Faso, where full production is expected in late 2010, says the company.
Several of Orezone's exploration properties, not related to the Essakane development project, will be spun out into a new exploration company called New Orezone, in which IAMGOLD will hold a 16.6% interest. Each Orezone shareholder will receive 0.08 of an IAMGOLD share and a pro rata share of New Orezone for each share of the company.
"Orezone shareholders will also participate in the creation of New Orezone that will retain Orezone's management and exploration team. New Orezone will be well financed through this transaction and host three advanced gold projects including Bombore, the second largest gold resource in Burkina Faso with 1.7 million ounces of measured and indicated resources,” said Ron Little, CEO of Orezone.
The transaction is expected to close by the end of February 2009.
"This business combination with Orezone is consistent with our strategy and takes IAMGOLD to the next level. This transaction represents excellent value and takes us a large step towards our stated goal of 1.8 million ounces annual gold production by 2012, while lowering our average cash cost by $40 to $50 per ounce,” said Joseph Conway, president and CEO of IAMGOLD.