IAMGOLD (TSX: IMG) has apparently determined it is easier to just buy a joint venture partner, rather than continuing to work with them on the development of a property. The firm this morning indicated it would be acquiring Vanstar Mining (TSXV: VSR) in an all-stock transaction that values the gold explorer at $31.1 million.
The transaction will see Vanstar shareholders receive 0.2008 of an IAMGOLD share for each share held, which equates to approximately $0.68 per share. Vanstar last closed at $0.455 on the Venture.
The justification for the acquisition appears to be Vanstar’s 25% stake in the Nelligan project, found in Northern Quebec. IAMGOLD owns a 75% stake, which could increase by 5% by the delivery of a feasibility study for the project, after which point the junior explorer would be forced to pay its fair share of development and construction costs to move the project towards commercial production. Vanstar also holds a 1% NSR on certain of the projects claims.
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Nelligan currently boasts a resource estimate of 72.2 million tonnes of indicated resources, which at an average grade of 0.85 g/t gold, equates to 1.97 million ounces of gold. An inferred resource of 114.1 tonnes at 0.88 g/t gold adds a further 3.24 million ounces of gold to the estimate.
The transaction, subject to shareholder approval, is expected to close in the first quarter of 2024.
IAMGOLD last traded at $3.41 on the TSX.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
