- AustraliaNorth AmericaWorld
Investing News NetworkYour trusted source for investing success
- Lithium Outlook
- Oil and Gas Outlook
- Gold Outlook Report
- Uranium Outlook
- Rare Earths Outlook
- All Outlook Reports
- Top Generative AI Stocks
- Top EV Stocks
- Biggest AI Companies
- Biggest Blockchain Stocks
- Biggest Cryptocurrency-mining Stocks
- Biggest Cybersecurity Companies
- Biggest Robotics Companies
- Biggest Social Media Companies
- Biggest Technology ETFs
- Artificial Intellgience ETFs
- Robotics ETFs
- Canadian Cryptocurrency ETFs
- Artificial Intelligence Outlook
- EV Outlook
- Cleantech Outlook
- Crypto Outlook
- Tech Outlook
- All Market Outlook Reports
- Cannabis Weekly Round-Up
- Top Alzheimer's Treatment Stocks
- Top Biotech Stocks
- Top Plant-based Food Stocks
- Biggest Cannabis Stocks
- Biggest Pharma Stocks
- Longevity Stocks to Watch
- Psychedelics Stocks to Watch
- Top Cobalt Stocks
- Small Biotech ETFs to Watch
- Top Life Science ETFs
- Biggest Pharmaceutical ETFs
- Life Science Outlook
- Biotech Outlook
- Cannabis Outlook
- Pharma Outlook
- Psychedelics Outlook
- All Market Outlook Reports
St. Barbara Acquires Atlantic Gold in US$536 Million Takeover
Australian miner St. Barbara has made a US$536 million bid to acquire BC-based Atlantic Gold in the latest M&A move in the gold space.
Australian gold miner St. Barbara (ASX:SBM,OTC Pink:STBMY) has begun the process of acquiring Canadian-owned Atlantic Gold (TSXV:AGB,OTC Pink:SPVEF) in a plan of arrangement worth US$536 million, the companies announced on Wednesday (May 15).
As per the agreement, St. Barbara will offer C$2.90 per share, which represents a 39 percent premium to Atlantic Gold’s closing price on Tuesday (May 14). Analysts are touting the deal as a move that could lead to growth options, but may also create challenges for St. Barbara.
“Buying an unknown asset in a new country which itself potentially requires a fresh injection of capital … could present an additional barrier for some investors,” RBC Capital told Reuters.
By purchasing the Canadian miner, St. Barbara will be adding Moose River Consolidated, which is owned and operated by Atlantic Gold, to its portfolio.
“The addition of Moose River to the portfolio diversifies St Barbara’s production base with a low cost producing asset in a very favourable and prospective jurisdiction. It is a sustainable long life operation of scale with a low [all-in sustaining cost] AISC position which generates impressive margins,” said Bob Vassie, managing director and CEO of St. Barbara.
The bid already has the backing of Atlantic Gold’s board and comes on the heels of fellow Australian gold miner, Newcrest Mining (ASX:NCM,OTC Pink:NCMGF), purchasing a copper and gold mine from BC-based Imperial Metals (TSX:III,OTC Pink:IPMLF) for US$806.5 million in March.
Gold is up close to 9 percent year-on-year in Australian dollars, while gold priced in US dollars remains relatively flat. Those circumstances have put mergers and acquisitions (M&A) in the focus for Australian companies focused on the yellow metal.
In fact, many market watchers have already named Evolution Mining (ASX:EVN,OTC Pink:CAHPF) and Northern Star Resources (ASX:NST,OTC Pink:NESRF) as companies that will more than likely join in on the M&A activity that has been growing within the gold space.
“The high AU gold price has benefited Aussie gold miners but they have also done very well operationally,” said UBS (NYSE:UBS) analyst Dan Morgan. He added, “In aggregate they have focused on cashflow which investors have liked.”
In terms of the deal itself, Atlantic Gold says the offer will deliver an attractive premium to shareholders and that executives of the miner, who control 32 percent of shares, have already backed the bid.
“(The deal) not only recognizes the value of our current plan for the MRC mine, but rewards shareholders for the future growth and exploration potential that defines MRC as a truly world class asset,” stated Steven Dean, chairman and CEO of Atlantic Gold.
Dean will be invited to join St. Barbara’s board and the company’s operating team will be retained.
Both companies anticipate that the deal will close sometime in July of this year.
As of 3:15 p.m. EDT on Wednesday, St. Barbara was trading at AU$3.32; meanwhile Atlantic Gold surged 37.56 percent to trade at C$2.88.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.
The Beginner’s Guide to Investing in Gold (Australia Edition)
Ready to invest in gold? Our beginner's guide makes it simple to get started.
Download your investing guide today.
Learn About Exciting Investing Opportunities in the Gold Sector
Your Newsletter Preferences
Investing News Network websites or approved third-party tools use cookies. Please refer to the cookie policy for collected data, privacy and GDPR compliance. By continuing to browse the site, you agree to our use of cookies.
Nicole is the Editorial Content Coordinator at INN, helping to create and manage educational content with a primary focus on gold. Nicole found her passion for all things finance while working in syndication and investor relations for a boutique investment banking company. Nicole has her BA in media studies and a postgrad in public relations. She holds a diverse writing portfolio covering topics such as finance, lifestyle and travel.
Learn about our editorial policies.