A journalist films four gold bars worth US$2 million, which are part of the new gold exhibition in the money museum in Frankfurt, Germany, Tuesday, April 10, 2018. Endeavour Mining Corp. has signed a deal to buy Teranga Gold Corp. in an all-stock deal valued at about $2.4 billion. THE CANADIAN PRESS/AP-Michael Probst

Endeavour Mining inks deal to buy Teranga Gold for $2.4 billion in shares

Endeavour Mining inks deal to buy Teranga Gold for $2.4 billion in shares

TORONTO — London-based Endeavour Mining Corp. is buying a second Canadian-based rival to further grow its gold-producing footprint in West Africa.

The company announced on Monday an all-stock deal valued at about $2.4 billion to buy Toronto-based Teranga Gold Corp., a week after the companies announced they were in talks.

In May, Montreal-based Semafo Inc. shareholders approved a $1-billion all-shares deal to be acquired by Endeavour.

“We believe that this transaction follows the successful M&A train we are currently seeing across the industry,” said Endeavour CEO Sebastien de Montessus on a conference call.

“There are many examples where good companies not necessarily needing to do M&A have come together and have immediately created value for their shareholders. We believe this transaction will do the same.”

Endeavour has two mines in Cote d’Ivoire and four mines in Burkina Faso as well as four potential development projects and a portfolio of exploration assets.

The purchase of Teranga adds a fifth producing mine in Burkina Faso and a mine in Senegal called Massawa, which Teranga bought from Toronto-based Barrick Gold in late 2019 in a deal that gave Barrick about 11.45 per cent of its shares.

Endeavour’s purchase of Semafo included its Boungou gold mine in Burkina Faso, an operation which was shut down in late 2019 after gunmen attacked a bus convoy, killing 39 people. It was reopened in October.

“When I look at the merger through the lens of Teranga shareholders, there’s a lot to like,” said Teranga CEO Richard Young on the call, citing low operating costs and a promising portfolio of exploration assets.

“What’s new for Teranga shareholders is a more diversified production base, with six core mines across three countries.”

Gold prices reached all-time highs above US$2,000 per ounce this summer.

De Montessus said Endeavour plans to seek a premium listing on the London Stock Exchange once the merger is concluded, where it will likely win a FTSE 100 index entry and thus appeal to a wider circle of investors.

On the Toronto Stock Exchange, Teranga shares rose by as much as 78 cents or 5.6 per cent to $14.62 on Monday while Endeavour shares fell briefly in early trading by $1.80 or 5.8 per cent to $29.14, before regaining all of the lost ground by 2 p.m. ET.

Endeavour says the deal has the support of its largest investors, including Barrick and Tablo Corp., together controlling 33 per cent, and La Mancha Holding, which with company officers and directors owns 24 per cent.

It said La Mancha has committed to invest US$200 million in support of the combination to further strengthen the balance sheet and the company will undergo an US$800 million refinancing to lower financing costs.

Endeavour is to pay 0.47 of a share for each Teranga share, a premium of 5.1 per cent based on Friday’s closing prices. The deal will result in a company owned 66 per cent by existing Endeavour shareholders and 34 per cent by Teranga investors.

The deal requires approval by shareholders at both companies with meetings expected to be held in the first quarter of next year.

By Dan Healing in Calgary.

This report by The Canadian Press was first published Nov. 16, 2020.

Companies in this story: (TSX:TGX, TSX:EDV)

The Canadian Press

mining

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Asymptomatic testing will now be available for "priority groups" who are most likely to spread the COVID-19 virus to vulnerable or at-risk populations. File photo by THE CANADIAN PRESS
Marcus Golczyk, with Taco Monster, hands food to a customer during Food Truck Drive and Dash in the Westerner Park parking lot in Red Deer Friday afternoon. The drive-thru event will run every Thursday from 4-7 p.m. and Friday from 11 a.m. to 2 p.m. through June. Photo by SEAN MCINTOSH/Advocate staff
Food Truck Fridays, Food Truck Drive and Dash return in Red Deer

Red Deerians are able to take in a drive-thru food truck experience… Continue reading

Don and Gloria Moore, of Red Deer, are set to celebrate their 70th anniversary later this month. (Contributed photo)
Red Deer couple to celebrate 70th anniversary

Red Deer couple Don and Gloria Moore are set to celebrate their… Continue reading

Chris Scott, owner of The Whistle Stop Cafe, was put in handcuffs after an anti-restriction protest Saturday in the parking lot of the business. (Screenshot via The Whistle Stop Facebook page)
UPDATE: Central Alberta cafe owner arrested after anti-restriction protest

The owner of a central Alberta cafe, which was the site of… Continue reading

Alberta has 1,910 active cases of COVID-19 as of Wednesday. Red Deer is reporting five active cases, with 108 recovered. (File photo)
Red Deer now has 911 active COVID-19 cases

Central zone has 2,917 active cases

FILE - A firefighter wears a mask as he drives his truck. THE CANADIAN PRESS/Jonathan Hayward, File
VIDEO: Flames rip through Edmonton-area seniors complex, but no fatalities

ST. ALBERT, Alta. — Fire has destroyed part of a retirement complex… Continue reading

Quebec Premier Francois Legault chairs a premiers virtual news conference as premiers John Horgan, B.C., Jason Kenney, Alberta, and Scott Moe, Saskatchewan, are seen onscreen, Thursday, March 4, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Several provinces bring in new restrictions as high COVID-19 case numbers persist

Several provinces are gearing up to tighten public health measures once again… Continue reading

Members of the RCAF take part in a Royal Canadian Air Force change of command ceremony in Ottawa on Friday, May 4, 2018. The Royal Canadian Air Force is hoping Canada will open its doors to military pilots from other countries as it seeks to address a longstanding shortage of experienced aviators. THE CANADIAN PRESS/ Patrick Doyle
RCAF turns to foreign pilots to help with shortage as commercial aviators stay away

OTTAWA — The Royal Canadian Air Force is hoping Canada will open… Continue reading

An arrivals and departures information screen is seen at the Halifax Stanfield International Airport in Halifax on Thursday, Jan. 4, 2018. The chief executive of Atlantic Canada's largest airport is hoping for COVID-19 testing for arriving passengers "sooner rather than later," as an added measure to combat the province's third wave of the virus. THE CANADIAN PRESS/Andrew Vaughan
Halifax airport CEO hopes for more on-site COVID testing ‘sooner rather than later’

HALIFAX — The chief executive of Atlantic Canada’s largest airport is hoping… Continue reading

Shoppers wear mask as they shop at a nursery & garden shop on Mother's Day weekend during COVID-19 pandemic in Wilmette, Ill., Saturday, May 8, 2021. (AP Photo/Nam Y. Huh)
Tearful reunions mark second Mother’s Day under pandemic

Last Mother’s Day, they celebrated with bacon and eggs over FaceTime. This… Continue reading

Arizona Coyotes head coach Rick Tocchet, standing, watches the game during the second period of an NHL hockey game Wednesday, April 14, 2021, in St. Paul, Minn. The Wild won 5-2. (AP Photo/Craig Lassig)
Tocchet won’t return as coach of Coyotes after 4 seasons

GLENDALE, Ariz. — The Arizona Coyotes and coach Rick Tocchet have mutually… Continue reading

Columbus Blue Jackets head coach John Tortorella shouts at an official after a fight between Columbus Blue Jackets' s Gavin Bayreuther and Florida Panthers' Sam Bennett during the second period of an NHL hockey game, Monday, April 19, 2021, in Sunrise, Fla. (AP Photo/Lynne Sladky)
Tortorella out after 6 years as Columbus Blue Jackets coach

COLUMBUS, Ohio — John Tortorella is out as coach of the Columbus… Continue reading

A caribou grazes on Baffin Island in a 2008 file photo. A last-ditch attempt to save some of Canada's vanishing caribou herds is a step closer after a scientific review panel's approval of a plan to permanently pen some animals and breed them to repopulate other herds. THE CANADIAN PRESS/AP-Kike Calvo via AP Images
Parks Canada captive caribou breeding proposal gets OK from scientific review panel

JASPER, Alta. — A last-ditch attempt to save some of Canada’s vanishing… Continue reading

The smouldering remains of houses in Slave Lake, Alta., are seen in a May 16, 2011, file photo. The wildfire that is devastating large swaths of the northern Alberta city of Fort McMurray comes just five years after another blaze destroyed 400 buildings and left 2,000 people homeless in Slave Lake, Alberta. THE CANADIAN PRESS/Ian Jackson
Ten years later: Five things to know about the Slave Lake wildfire

A wildfire burned about one-third of Slave Lake in northern Alberta in… Continue reading

Most Read