Resolute Mining Ltd said on Wednesday it would buy West Africa-focused Toro Gold Ltd in a cash and stock deal worth $274 million, as the company looks to expand production amid a run of consolidation in the gold industry.
West Australia-based Resolute, which has mining operations in Africa, said it would acquire privately held Toro for $130 million in cash and 142.5 million Resolute shares.
The gold industry has seen an increase in takeovers and mergers as miners look to bolster reserves to boost growth and take advantage of rising gold prices.
Gold prices have risen nearly 12% so far this year, with most of the gains coming in the June quarter.
Toro Gold’s flagship asset is the low-cost, high-margin Mako Gold Mine in Senegal, which is known as a mining friendly jurisdiction.
Resolute said it now expects full year 2019 production at 400,000oz of gold at an all-in sustaining cost of $960/oz, which includes production from the Mako acquisition.
It has received acceptances from 94% of Toro shareholders, giving it control of the company from Aug. 2, and will move to compulsorily acquire any residual shares on Sept. 13 (Reporting by Nikhil Subba in Bengaluru; editing by Richard Pullin).