Fresnillo, world's largest primary silver producer and Mexico's largest gold producer announces that it has entered into a definitive arrangement agreement with Probe Gold Inc. to acquire 100% of the issued and outstanding shares of Probe for an all-cash consideration of CAD$3.65 per Share. The total equity value of the Transaction is approximately CAD$780 million, (approx. US$560 million) on a fully diluted basis.
Probe is a leading Canadian exploration company focused on the acquisition, exploration, and development of highly prospective gold properties. It is the 100% owner of the multimillion-ounce Novador Gold Project, as well as an early-stage Detour Gold project, both located in Quebec.
Highlights of the Transaction
- Strategic entry into Canada, a world class Tier 1 mining jurisdiction and the prolific Val d'Or Mining camp in Quebec which has a long-standing history of gold mining and continued production growth, with a skilled local workforce and existing infrastructure.
- Adds a large resource base of 10 million ounces of gold including 8 million ounces of gold at its flagship project, Novador.
- Novador is an advanced gold project which has the potential to produce over 200,000 ounces per annum over 10+ years.
- Substantial exploration upside through Probe's large, underexplored land package of approximately 1,798km2, including Novador Gold Project in Quebec, as well as an early-stage project, Detour Gold Quebec, which can leverage Fresnillo's technical and exploration capabilities and track record.
- ·Acquisition in line with Fresnillo's stated strategy, balancing a disciplined, opportunistic and value-driven approach to M&A opportunities with a focus on early stage projects that align with its core operations in precious metals, while maximising the value of its existing portfolio.
- Once the transaction is complete, Fresnillo will look to advance the development of the Novador project, building on its long track record of successfully bringing major new mines into production.
Fresnillo CEO Octavio Alvídrez commented:
"We are delighted to announce the acquisition of Probe Gold, a company that fits our pursuit of high-quality exploration projects. This acquisition is consistent with our disciplined approach to M&A we have consistently set out over time. It meets our strict criteria of having a sizeable resource base with upside optionality in a region with mining history, skilled personnel, and existing infrastructure. We carried out extensive due diligence to determine the attractiveness of this investment to both minimise risk and ensure the acquisition has the potential to add considerable longer term value for our shareholders.
"Fresnillo has a significant track record of identifying, developing, building and operating successful gold and silver mines. We will take that considerable experience and build on the current work completed by Probe's excellent team. We are confident that together we will continue to advance and further optimise the project. We are excited to be coming to Canada, an outstanding mining jurisdiction with a global reputation for responsible development, and to the Val d'Or region with its proud history of mining. We look forward to engaging with all stakeholders to ensure shared value creation and success at Novador and our other early stage exploration projects.
"While Mexico will remain central to our operating and growth strategy, Probe's assets will meaningfully complement our existing pipeline of projects and prospects. We are confident that the Novador project, together with our advanced exploration projects in Mexico, will underpin Fresnillo's long term future, further positioning us as one of the leading precious metals companies in the world."
