Eldorado Gold Corp (TSX: ELD) announced on Monday that it has entered into an agreement to acquire the remaining shares of Integra Gold Corp (TSX: V.ICG). Eldorado has negotiated a purchase price of $590 million. This represents a 52% premium on Integra’s share price, based upon its closing price in trading on Friday.
The acquisition is being billed as a friendly takeover as ELD already held 13% of Integra’s shares. For Eldorado, the acquisition is an opportunity to expand its mining opportunities in the famed Abitibi Gold Camp of Quebec and Eastern Ontario. Integra’s principal asset is its Lamaque project, located near Val d’Or.
The property has been advanced to the stage of a Preliminary Economic Assessment. That report estimates that Lamaque has the current potential to produce 123,000 ounces of gold per year, over a ten-year mine life.
This deal will be of great interest to the Stockhouse audience. Several Val d’Or junior gold exploration companies have been featured at Stockhouse over recent months. These include Alexandria Minerals Corp (TSX: V.AZX, OTCQB: ALXDF, Forum), Bonterra Resources Inc (TSX: V.BTR, OTCQB: BONXF, Forum), Cartier Resources Inc (TSX: V.ECR, OTCQB: ECRFF, Forum), Knick Exploration Inc (TSX: V.KNX, Forum), and QMX Gold Corp (TSX: V.QMX, OTCQB: QMXGF, Forum).
All of these junior gold exploration companies have large land packages in the Val d’Or Gold Camp. Their projects range from early-stage exploration properties all the way up to advanced staged projects with defined resources. With the acquisition of Integra by Eldorado (at a substantial premium to its current price), Stockhouse investors will be asking themselves whether this is a signal that the Val d’Or gold companies are now in play.
Who would be doing the buying with respect to any other potential Val d’Or acquisitions? While a number of larger gold companies could potentially be on the other end of such deals, two names lurking prominently in the background are household names in the Canadian gold sector: Agnico Eagle Mines Ltd (TSX: AEM) and Osisko.
AEM already holds a substantial strategic interest in several of the Val d’Or juniors listed above, similar to Eldorado’s previous holdings in Integra. Osisko Gold Royalties Ltd (TSX: OR, OTCQB: OSKGF, Forum) is another Stockhouse client which holds royalty interests in several of these Val d’Or juniors – including a 1.7% NSR on Integra’s Lamaque project.
Osisko Mining Inc (TSX: OSK) is very active in the Val d’Or Camp with its own gold exploration/development operations. With a current market cap of just under $900 million, clearly OSK is also large enough to acquire one (or more) of its smaller Val d’Or neighbours.
The Val d’Or Gold Camp has been a hot-spot in the Canadian gold mining industry over the past few years, with several active companies moving forward on very promising projects. Investor sentiment in the gold sector in general has waned in recent weeks with the temporary retreat in prices. However, with this Integra deal, things might once again be heating up in the gold sector – or at least in one especially active gold district.
FULL DISCLOSURE: Alexandria Minerals Corp, Bonterra Resources Inc, Cartier Resources Inc, Knick Exploration, Osisko Gold Royalties, and QMX Gold Corp are all paid clients of Stockhouse Publishing.