AMN - COTE D’IVOIRE: Perseus acquiring near-mine projects

Perseus Mining is acquiring Exore Resources which will result in it gaining a gold project near its Sissingué Gold Mine in Côte d’Ivoire. Exore's Bagoe and Liberty projects are within trucking distance of the Sissingué with Bagoe having an indicated resource of 90,000 ounces with a further 440,000 ounces in the inferred category.

The parties have entered a Scheme Implementation Deed which will see Perseus acquire 100% of Exore and the agreement provides a fully diluted equity value of A$59.8 million based on Perseus’ 10 trading day VWAP.

Exore will exercise its pre-emptive right to acquire the remaining 20% of the Bagoe and Liberty projects from Apollo Consolidated Limited’s in northern Côte d’Ivoire for US$4.5 million to obtain 100% ownership.

Exore’s board unanimously recommends that Exore shareholders vote in favour of the scheme, in the absence of a superior proposal and subject to an independent expert’s report concluding that the scheme is in the best interests of shareholders.

Acquisition of the remaining interest in the projects will be funded by Exore from its existing cash.

The scheme consideration of A$59.8 million is calculated on a fully diluted basis applying a purchase price of A9.8 cents per share and this is based on Perseus’ 10 trading day VWAP.

Consideration will be paid in the form of shares in Perseus with each Exore shareholder receiving 1 Perseus share for every 12.79 Exore shares held.

This share swap ratio is based on the 10-day VWAP of Perseus shares on June 2, 2020, and implies a price of A10.5 cents per Exore share based on Perseus’ closing share price on that date.

Exore holds around 2,000 square kilometres of highly prospective land near the Sissingué mine.

An 80% joint venture in exploration permits making up the Bagoe and Liberty projects, which cover 816 square kilometres, was acquired from Apollo in December 2018.

Exore then expanded this position through additional earn-in and joint venture agreements with local Ivorian groups.

This area is relatively under-explored but known to host geological structures on which several significant gold discoveries have previously been made.

Perseus managing director and CEO Jeff Quartermaine said: “The acquisition of Exore results in Perseus gaining ownership of approximately 2,000 square kilometres of geologically prospective land in northern Côte d’Ivoire, close to our operating Sissingué Gold Mine.

“Sissingué has a mine life of three years from July 1, 2020, and with the acquisition of Exore’s land package, including defined mineral resources, we have the option of developing Bagoe into a new mine potentially using the Sissingué infrastructure, or alternatively, delineating further mineral resources that can be economically mined and trucked to our Sissingué plant for processing.

“Either option provides an opportunity to continue creating value for Perseus’s shareholders.”

Exore managing director Justin Tremain said: “The board of Exore believes the proposed transaction with Perseus represents compelling value for Exore shareholders.

“In addition to the premium implied by the transaction consideration, Exore shareholders have the opportunity to benefit, at a time of near-record gold prices, from Perseus’s strong development and production capabilities.

“These position Perseus as the ideal counterparty to unlock the future value of the company’s Bagoe project, whilst de-risking the need for Exore to discover additional ounces to support a standalone operation or fund a standalone development.”

Tremain added: "There are significant potential synergies that can be realised by utilising Perseus’s pre-existing infrastructure in any future development of Exore’s projects with the Sissingué infrastructure comfortably within trucking distance of the Bagoe project.

"Exore shareholders will also benefit from exposure to Perseus’s existing production and development assets, which provide an exceptional growth profile.”

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