Tied to be senior gold producer!

Endeavour and Teranga at M&A way

Combination to create new senior gold producer 

Endeavour Mining Corporation and Teranga Gold Corporation are announcing that they have entered into a definitive agreement whereby Endeavour will acquire all of the issued and outstanding securities of Teranga by way of a Plan of Arrangement under the Canada Business Corporations Act 

Existing Endeavour and Teranga shareholders will own approximately 66% and 34%, respectively, of the combined company on a fully diluted in-the-money basis. Pursuant to the Plan of Arrangement, Teranga common shares will be exchanged at a ratio of 0.470 Endeavour ordinary shares for each one Teranga common share. 

The Exchange Ratio represents a modest premium of 5.1% based on the closing price of Endeavour and Teranga’s shares on the TSX on November 13, 2020 and 9.4% based on the 20-day volume weighted average price of both companies for the period ended November 13, 2020.  

Sébastien de Montessus, President and CEO of Endeavour, said: “This combination offers an attractive opportunity to both sets of shareholders. By combining our complementary assets, we will enhance our strategic position on West Africa’s highly prospective Birimian Greenstone Belt and we will have the ability to deliver material synergies. 

The combined entity will become a new senior gold producer and enjoy an improved capital markets profile, underpinned by a healthy balance sheet and strong cash flow capabilities to support a sustainable dividend. 

This transaction is immediately accretive to our shareholders on a NAV basis and broadly CFPS and EPS neutral over the next two years. It will be strongly accretive from 2023 when Sabodala-Massawa is ramped up into a top asset in the region while immediately adding geographic diversification into mining-friendly Senegal. 

The Wahgnion mine provides immediate cash flow and the rapidly advancing Golden Hill and Afema projects offer further growth optionality. The Teranga management team has done an outstanding job unlocking value and we look forward to continuing to deliver returns for shareholders through the creation of a business with outstanding prospects.” 

Richard Young, President and Chief Executive Office of Teranga, said: “We have taken Teranga from a single asset producer to a low cost, mid-tier gold producer over the past few years.  This combination with Endeavour, strongly supported by our two largest shareholders, allows Teranga shareholders to benefit from an improved valuation as owners of a best in class senior gold producer with among the lowest costs as well as among the best balance sheet, free cash flow yield, growth pipeline and dividend yield.” 

Teranga is a low cost, mid-tier gold producer in West Africa with two producing gold mines and an attractive growth pipeline in Senegal, Burkina Faso and Côte d’Ivoire. Teranga is expected to produce 533,000 ounces of gold per year at average all-in-sustaining costs of $785 per ounce over the next five years. Endeavour is a leading West African gold producer with six mines across Burkina Faso and Côte d’Ivoire with a production profile of over 1 million ounces at below $900 per ounce.