27 Apr Fortuna Silver Mines turns to West Africa with $884 million Roxgold acquisition
Latin America-focused Fortuna Silver Mines has announced a cash and stock deal worth US$884.3 million for Roxgold, a gold miner with projects in Burkina Faso and Côte d’Ivoire.
TSX-listed Fortuna, which has operations in Peru, Mexico and Argentina, said the combined company would produce about 450,000 ounces of gold equivalent a year, at all-in sustaining costs of $950 per gold equivalent ounce with a declining cost profile.
Roxgold’s primary assets include the high-grade Yaramoko Mine Complex located on the Houndé greenstone belt in Burkina Faso, and the Séguéla gold development project in Côte d’Ivoire.
The acquisition will create a low-cost platform for gold and silver production growth in the world’s fastest growing precious metals producing regions, read a statement by both companies.
Jorge A. Ganoza, president and CEO of Fortuna said: “With Roxgold we are acquiring a complete business platform which brings: i) low-cost gold production; ii) a permitted feasibility stage development project; iii) a robust exploration pipeline; and iv) key members of a seasoned executive team of proven mine builders, developers, and explorers in West Africa.
“The combined company will be in a stronger position to continue accelerating the development of the Séguéla gold project at a lower cost of capital and aggressively pursuing the potential of a most exciting exploration pipeline in West Africa and Latin America.”
The deal is the latest evidence of a ‘second wave’ of mergers and acquisitions in the precious metals sector. With the gold price remaining at around $1,750 per ounce of late, producers are continuing to look to replenish reserves with consolidatory deals, particularly in the small to medium-sized space.