Endeavour Mining Corp. (TSX: T.EDV, Stock Forum) has struck a deal to acquire all of the issued and outstanding shares of Avion Gold Corp. (TSX: T.AVR, Stock Forum) via a court-approved plan of arrangement.
Under the agreement, each Avion common share can be exchanged for 0.365 of an Endeavour common share, an arrangement that values Avion at 88 cents a share or $389 million. Valuations are based on the closing price of both companies on August 7.
The acquisition will immediately increase Endeavour’s forecast gold production to 304,000 ounces for 2012, a 50% increase from 282,000, the company said in a press release.
The acquisition of Avion will create one of the largest West African mining companies, with three producing mines, a fourth mine currently in construction, and an attractive pipeline of exploration and resource development properties.
The agreement was announced after the close of trading Tuesday, when Endeavour rose 1.69% to $2.40, leaving the company with a market cap of $588.2 million, based on 245.1 million shares outstanding. Avion gold closed up 6% at 56 cents, leaving the company with a market cap of $248.2 million, based on 443.3 million shares outstanding. The 52-week range is $2.57 and 41 cents.