Endeavour Mining confirms ‘merger of equals’ talks with Teranga Gold

Endeavour Mining is currently in ‘merger of equals’ discussions with fellow West Africa-focused miner Teranga Gold, a move that would create a dominant gold producer in the region.

TSX-listed Endeavour responded to recent media speculation with an announcement today that confirmed talks were ongoing with Teranga, also listed on the TSX, regarding the deal.

“These discussions may or may not result in an agreement in respect of a potential transaction and any transaction would only be pursued if the board of Endeavour believed that it represented a compelling value creation opportunity for its shareholders,” the statement read.

A successful tie-up between the two parties would create a C$7.45 billion company, based on Endeavour’s $5.25 billion market capitalisation and Teranga’s $2.2 billion market value.

Endeavour’s portfolio contains two gold mines in Côte d’Ivoire and four in Burkina Faso, plus four development projects across West Africa. Meanwhile, Teranga operates two producing mines in Senegal and Burkina Faso and is developing the Golden Hill project in Burkina Faso.

Both companies have been busy with acquisitions over the last 12 months: Teranga bought a 90% stake in Barrick’s Massawa project in Senegal last year and Endeavour completed a US$732 million deal for Semafo earlier this year.

Further consolidation in West Africa brings with it the possibility of economies of scale which could help miners manage increasing security costs, particularly in the unstable Sahel.