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AngloGold Ashanti submits proposal to acquire Corvus Gold

 

 

 

AngloGold Ashanti Limited has announced that a non-binding proposal has been submitted to the Board of Directors of Corvus Gold Inc. under which its direct wholly-owned subsidiary, AngloGold Ashanti Holdings plc (AGAH), would be willing to acquire for cash all of the issued and outstanding common shares of Corvus, which the company does not already beneficially own (the Proposed Transaction).

AngloGold Ashanti currently holds a 19.5% indirect interest in Corvus, which is incorporated in British Columbia, Canada and listed on the Toronto Stock Exchange (TSX) and NASDAQ.

 

 

 

Corvus owns North Bullfrog, Mother Lode and other exploration assets located in southern Nevada’s Beatty District, which are in close proximity to, or contiguous with, AngloGold Ashanti’s exploration assets of Silicon, Transvaal and Rhyolite.

 

 

Christine Ramon, AngloGold Ashanti’s Interim Chief Executive Officer, said: “The Proposal is fully aligned to our strategy of growing Ore Reserve, building low-cost production and generating sustainable returns. We have a unique opportunity to combine Corvus’ assets with our own – in the world’s top-ranked mining jurisdiction – to create a meaningful new production base for AngloGold Ashanti in the medium and longer term.”

The combination of Corvus’ and AngloGold Ashanti’s Nevada assets further consolidates one of the largest new gold districts in Nevada and provides the opportunity for AngloGold Ashanti to establish, in the medium and longer-term, a meaningful, low-cost, long-life production base in a premier mining jurisdiction.

 

 

Consolidation of the Beatty District has the potential for significant synergies from economies of scale and integrated infrastructure including processing facilities.

The combined asset base allows for streamlined engagement with federal, state and local stakeholders to advance and achieve shared sustainability goals and other district benefits, such as opportunities to design projects incorporating renewable energy, as well as develop conservation and other local projects in conjunction with the Beatty community.

 

 

AngloGold Ashanti has a long track record of operating gold mines in the United States, where it operated the Cripple Creek & Victor mine in Colorado from acquisition in 1999 through to its sale to Newmont Corporation in 2015 and the Jerritt Canyon Gold mine in Nevada from acquisition in 1999 through to its sale in 2003 and where it is still conducting closure monitoring activities at the Big Springs mine in Nevada that was closed in 1994.

The company has a North American regional office in Denver, Colorado, from where it manages its U.S. business interests as well as a global greenfield exploration portfolio, including its portfolio in the United States.

 

 

The proposal follows the announcement by Corvus on 6 May 2021 that it had entered into a US$20 million unsecured loan and guaranty agreement (the “Loan Agreement”) with AngloGold Ashanti North America Inc., an indirect wholly-owned subsidiary of AngloGold Ashanti.

As a result of the Loan Agreement, AngloGold Ashanti was granted an initial exclusivity period of 90 days, during which the Company was allowed to conduct a detailed due diligence exercise on Corvus and its key assets.

Under the terms of the Loan Agreement, the initial exclusivity period would be extended by a further 30 days in the event AngloGold Ashanti submits a letter of intent or proposal.

 

 

Proposal

AngloGold Ashanti proposes that AGAH will acquire all of the issued and outstanding Corvus shares (other than the Corvus shares currently beneficially owned by the Company) in exchange for consideration of C$4.00 per Corvus share (the “Offer Price”), payable in cash.

The Offer Price represents a premium of approximately 55% to the undisturbed price of C$2.58 per Corvus share on 5 May 2021, prior to the announcement of the Loan Agreement, a premium of approximately 23% to the closing price per Corvus share prior to the submission of the Proposal and a premium of approximately 20% to the last 10-day volume weighted average price of Corvus shares on the TSX.

 

 

Based upon the Offer Price, AngloGold Ashanti estimates that the total cash consideration payable to shareholders (other than AngloGold Ashanti) for the Proposed Transaction is approximately US$370 million (inclusive of payments in respect of Corvus’ outstanding options).

AngloGold Ashanti is required under applicable laws and regulations to publicly file the proposal to Corvus in the United States.

The company is focused on working closely with Corvus’ Board of Directors and management in a friendly manner to agree the terms of, and implement the Proposed Transaction.

 

 

Following the submission of the Proposal, AngloGold Ashanti expects to engage with Corvus’ Board of Directors regarding the Proposed Transaction and in parallel complete certain limited confirmatory due diligence relating to Corvus and its assets.

The Company has completed all technical, legal and financial due diligence that would impact the value of the Proposal.

AngloGold Ashanti expects to structure the Proposed Transaction as a plan of arrangement in accordance with Canadian corporate law.

 

 

Following the support and recommendation of the Board of Corvus, this will require that shareholders of Corvus vote in favour of the Proposed Transaction.

In order to become effective, the plan of arrangement will also be subject to Canadian court approval.

Shareholders will be kept updated in this regard.

Required Early Warning Report and Other Regulatory Information

 

 

As of the date hereof, AngloGold Ashanti, and its affiliates and associates, have beneficial ownership and control of 24,774,949 Corvus shares, representing approximately 19.5% of the issued and outstanding Corvus shares.

Source: classfmonline.com

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