Capital Market

Gold X stock shines on Gran Colombia buyout

Gold X stock shines on Gran Colombia buyout
Mining News Pro - The share price of Canadian junior Gold X Mining rose sharply on Monday, after the company announced that it has agreed to be bought out by TSX-listed Gran Colombia in an all-share transaction valued at C$319-million.

Gold X will be acquired in exchange for Gran Colombia common shares on the basis of 0.6948 a share, implying a consideration of C$4.10 a Gold X share.

The exchange ratio represents a premium of 39% based on the closing price of the Gold X shares on the TSX-V on the value date and a 44% premium based on the 20-day volume-weighted average price of the Gold X shares.

Gold X’s shares rose 26% to C$3.73 apiece on Monday.

“The contemplated acquisition will provide Gran Colombia with an opportunity to add a large-scale, long-life Latin American gold development project to its portfolio. When this transaction is consummated, the Toroparu gold project will join our Segovia Operations as cornerstones of our long-term growth strategy,” said Gran Colombia chairperson Serafino Iacono.

The Toroparu project, in Guyana, boasts 4.5-million ounces of life-of-mine gold production over a 24-year mine life. Gold X CEO Paul Matysek said he believed Gran Colombia was the ideal partner to bring Toroparu into production.

Gold X will call a meeting of shareholders in May to seek shareholder approval for the arrangement.

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