Centerra and Premier pursuant of MoU

 

Orion will acquire Centerra's 50% interest 

Premier Gold Mines and Centerra Gold announces that an affiliate of the Orion Mine Finance Group, has entered into an agreement with Centerra and Premier pursuant to which Orion will acquire Centerra's 50% interest in the Greenstone Gold Mines-GGM Partnership for cash consideration of US$225 million plus certain contingent payment obligations of approximately US$75 million, described below. Premier currently owns the other 50% of GGM. 

GGM’s principal asset is the Hard rock Mine Project located on the Trans-Canada Highway near Gerald ton, Ontario, Canada and represents one of the most significant large-scale, permitted, mine development opportunities in North America.

Under the terms of the Purchase Agreement, Premier and Centerra, through their respective affiliates, will cause GGM to provide a guarantee to Centerra in respect of the obligations of Orion to make the Contingent Payments, if any, and with respect to an early termination amount payable to Centerra upon early termination of the Purchase Agreement in certain circumstances, all of which will be secured by a fixed and floating charge and a continuing security interest in the GGM property. 

Following the closing of the Transaction, Orion intends to support a positive feasibility decision for the Hard rock project based on the feasibility study conducted in 2019. 

The Transaction is subject to customary closing conditions for a transaction of this nature including the approval of the Toronto Stock Exchange in respect of Premier with respect to the guarantee and the charge described above. It is also a condition of closing of the Transaction that all parties to the previously-announced Hardrock legal actions and related counterclaims, as well as Premier and Centerra, will provide a mutual release and consent dismissal in respect of the action and the related counterclaims. The Transaction is expected to close in January 2021.

“This transaction paves the way for the development of Premier’s flagship asset.  We look forward to working with Orion, a long-standing supportive partner of Premier, in advancing the Hardrock Project on an expedited timeline”, stated Ewan Downie, President and CEO of Premier. “This new partnership will unlock the substantial value of one of North America’s most advanced, permitted and well-located, multi-million-ounce gold projects.” 

Istvan Zollei, portfolio manager at Orion, commented: “Orion looks forward to being a partner in turning the Hardrock Project into Ontario’s next prominent mine. After years of successful exploration and development work, we believe the Greenstone Project has the potential to grow into a large, long-lived gold mining operation with multiple deposits.”