IAMGold to buy Orezone outstanding shares Thursday December 11, 10:20 am ET IAMGold to acquire Orezone outstanding shares worth $139M, Essakane project
NEW YORK (AP) -- Canadian gold-mining company IAMGold Corp. said Thursday it will buy Orezone Resources Inc. for about $139 million and take over Orezone's Essakane project in West Africa.
Shareholders of Canada-based gold miner Orezone will receive 0.08 common shares of IAMGold.
IAMGold will also acquire and finance development of the Essakane project, one of West Africa's largest undeveloped gold reserves. In September, construction began at a mine estimated to produce an average of over 300,000 ounces of gold per year, over a minimum nine-year mine life at an average cash operating cost of $358 per ounce. The company said it expects full production will be in full swing in late 2010.
"This transaction represents excellent value and takes us a large step toward our stated goal of 1.8 million ounces annual gold production by 2012, while lowering our average cash cost by $40 to $50 per ounce," said Joseph Conway, IAMGold's chief executive.
As part of the transaction, several of Orezone's exploration properties not related to Essakane, will be spun out into a new exploration company, "New Orezone," in which IAMGold will become a 16.6 percent shareholder.
The company also plans to set up a corporate African operations office based in Dakar, Senegal.
Shares of IAMGold added 9 cents to $4.82 in morning trading. Shares of Orezone more than doubled to 37 cents. They closed at 12 cents on Tuesday.
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