IAMGOLD Corporation (TSX: T.IMG, Stock Forum) Friday said it has entered into a definitive agreement to acquire all of the issued and outstanding common shares of Trelawney Mining and Exploration (TSX: V.TRR, Stock Forum). Trelawney shareholders will receive $3.30 in cash for each Trelawney share held, or a total consideration of approximately $608 million.
"The acquisition of Trelawney creates a larger and more geographically balanced portfolio of long-life gold assets for IAMGOLD. This transaction provides an accretive return on invested capital as we are effectively redeploying the cash proceeds from the sale of non-core assets last year into a Canadian gold project that significantly strengthens our future gold production profile. This is consistent with our strategy to invest in development projects that we own and operate so we can derive maximum benefit from leveraging our operational and development expertise. Trelawney is an excellent strategic fit with our existing Canadian portfolio and we look forward to advancing this promising property," said IAMGOLD President and CEO Stephen Letwin.
In Trelawney, IAMGOLD is buying a Canadian junior that has been focused on the development of the Côté Lake Deposit located adjacent to the Swayze Greenstone Belt in northern Ontario. Its project has an Inferred resource of 5.94 million ounces of contained gold, with 0.93 million ounces in the Indicated category.
Shares of Trelawney are soaring more than 41% to $3.28 in early Friday trading. Jennings Capital, on Friday, raised its target price on the stock from $4 to $4.25, saying there’s a strong possibility of a competing offer for Trelawney.