ASX-listed Perseus Mining has added a highly touted gold project to its portfolio after entering into a unanimously recommended agreement to acquire all outstanding shares of Orca Gold.
Currently owning 15 per cent of Orca shares, Perseus will look to complete the acquisition by offering all outstanding Orca shareholders 0.56 Perseus shares for every Orca share held.
This values Orca shares at $C0.896 ($0.98) each based on Perseus’ closing price on February 25, representing a 62.9 per cent premium to Orca’s closing share price ($C0.55) on the same day.
Total payment consideration by Perseus includes $C198 million in Perseus shares to enable the company to acquire the outstanding 85 per cent stake. A further $C17 million is attributed to cash previously paid by Perseus to acquire the initial 15 per cent interest.
The purchase will see Perseus add a fourth gold project to its portfolio – Orca’s flagship Block 14 gold project in northern Sudan.
Orca has a 70 per cent interest in the project which, according to a 2020 feasibility study, has an indicated resource of 79.9 million tonnes (Mt) at 1.3 grams per tonne (g/t) gold for 3.3 million ounces (Moz). It has an inferred resource of 18.5Mt at 1.2g/t gold for 0.7Moz of gold.
The feasibility study indicated Block 14 will have a mine life of more than 13 years and produce more than 228,000 ounces per annum across the first seven years. At a $US1900 per ounce gold price, Block 14 has a net present value (NPV) of more than $US1 billion.
“We have the financial capacity, technical expertise and in-country relationships, in combination with Orca’s existing management team, to bring Orca’s Block 14 Project into production and in the process, create material benefits for all stakeholders including the government and citizens of Sudan,” Perseus managing director and chief executive officer Jeff Quartermaine said.
“When the transaction is completed, Perseus will have three operating mines currently producing gold at a rate of approximately 500,000 ounces per year and a high-quality development project that if brought on stream, as intended, should ensure that Perseus can maintain or exceed its targeted production level well into the next decade.”
As part of the agreement, Orca shareholders will own approximately 9.1 per cent of the enlarged Perseus.