Published: November 21, 2023 |

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[Click image to enlarge]

Canada-based mid-tier gold producer Calibre Mining has agreed to acquire Valentine gold project owner Marathon Gold in an all-stock deal that values the latter at $250 million (C$345 million).

According to the terms of the definitive agreement, Calibre Mining will issue 0.6164 of a common share for each Marathon Gold share acquired.

The consideration represents an implied value of $0.61 (C$0.84) per share for Marathon Gold.

Through the merger with Marathon Gold, Calibre Mining aims to develop an Americas-focused, high-margin, high-growth, mid-tier gold producer with an estimated average annual gold production of nearly 500koz per year.

“Calibre has delivered on its commitment to create significant value for its shareholders through a disciplined approach to operations and exploration. This transaction builds on that commitment, adding a high-quality gold asset in the final stages of construction with strong exploration upside in one of the top mining jurisdictions in the world,” said Darren Hall, president and chief executive officer of Calibre.

“With Calibre’s strong operational expertise and robust cash flow, I am confident that together with the Marathon team, we will continue to meet or beat expectations. I look forward to working with the team in Newfoundland and Labrador as they have done an excellent job de-risking, engineering and advancing construction on the Valentine Project,” added Hall.

The enlarged company is estimated to have a combined cash balance of $148 million and significant free cash flow generated from Calibre Mining’s existing mines.

It is projected to support the easier completion of the Valentine project located in the central region of Newfoundland and Labrador during the final 50 percent of construction.

In line with the proposed combination, Calibre Mining will buy a non-brokered private placement basis 66.6 million common shares of Marathon Gold at $0.43 (C$0.6) per share for gross proceeds of $28.95 million (C$40 million).

This represents an equity interest of 14.2 percent in Marathon Gold on an issued and outstanding basis. The private placement is not subject to the completion of the transaction.

“The business combination with Calibre offers Marathon shareholders the opportunity to participate in the growth of an important new mid-tier gold producer on track to produce 500,000 oz of gold a year. Through this transaction, Valentine will be fully funded to production without additional debt, royalties, or shareholder equity. The combined company will have three high quality, cash flowing gold assets, a strong balance sheet, and leadership with proven credentials in value creation,” said Matt Manson, president and chief executive officer of Marathon.

“The transaction offers the ability to fully realize the potential of Valentine without the limitations of the single asset project developer. We are proud of the work accomplished to date by the Marathon team, and strongly recommend this transaction in the interests of shareholders, Marathon’s employees and community partners, and the Province of Newfoundland & Labrador,” added Manson.

Subject to shareholder, regulatory, court, and TSX approvals and other customary conditions, the deal is anticipated to be completed next year.

Source: NS Energy

Calibre Mining is a Canadian-listed, Americas focused, growing mid-tier gold producer with a strong pipeline of development and exploration opportunities across Nevada and Washington in the USA, and Nicaragua. Calibre is focused on delivering sustainable value for shareholders, local communities, and all stakeholders through responsible operations and a disciplined approach to growth. With a strong balance sheet, a proven management team, strong operating cash flow, accretive development projects and district-scale exploration opportunities Calibre will unlock significant value.

Marathon Gold is a Toronto based gold company advancing its 100 percent owned Valentine Gold Project located in the central region of Newfoundland and Labrador, one of the top mining jurisdictions in the world. The project comprises a series of five mineralized deposits along a 32-kilometer system. A December 2022 updated feasibility study outlined an open pit mining and conventional milling operation. The project was released from federal and provincial environmental assessment in 2022 and construction commenced in October 2022.

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