The transaction will create a new precious metals producer focused on the Americas with a diverse asset portfolio, including three producing mines, an advanced stage project and significant exploration potential.
Consideration at a 51% premium
Beadell shareholders will receive 0.0619 common shares of Great Panther for each ordinary Beadell share, resulting in around 103.6 million Great Panther shares being issued.
The exchange ratio implies consideration of 8.6 cents per Beadell share, giving an equity value for Beadell of around $144 million, and representing a 51% premium over Beadell’s closing share price on 21 September.
Upon completion of the transaction, existing Beadell and Great Panther shareholders are expected to own around 38% and 62%, respectively, of the combined company.
Expediting Tucano operational turnaround
Beadell managing director & CEO Nicole Adshead-Bell said Beadell shareholders would benefit from Great Panther’s strong balance sheet, steady cash flow, experienced management team and improved market liquidity through its TSX and NYSE American listings.
She said: “The combined company will pool resources to expedite the execution of Tucano’s ongoing operational turnaround.
“Jim Bannantine, the president and CEO of Great Panther, has the technical background and corporate experience, including several years living and working in Brazil, to complement the Tucano mine site team in improving all aspects of operational performance and growing the resource base.
Adshead-Bell has accepted the invitation to join Great Panther’s board of directors following completion of the transaction.
Diverse asset portfolio
The combined company will have three mining operations in Mexico and Brazil as well as the Coricancha project in Peru.
It is anticipated to have attributable proven and probable reserves of around 1.5 million ounces of gold and a cash balance of $US74 million, enabling ongoing optimisation initiatives at the Tucano Gold Mine in Brazil.
Beadell operates the Tucano mine in Brazil’s Amapa State, within 2,500 kilometres of highly-prospective and under-explored Birimian age greenstone terrane.
Tucano’s plant is being upgraded to process around 3.5 million tonnes per year of oxide-sulphide ore in a range of blends.
The mine has a pipeline of high-potential in-mine and near-mine prospects, anchored by several high-grade gold intervals over several metres, representing a near-term opportunity to improve head grade and prolong mine life.