Resolute to acquire Toro Gold for US$ 274 million

LONDON: Resolute Mining Limited has signed a binding agreement (Implementation Agreement) with Toro Gold Limited pursuant to which Resolute will acquire all of the shares of Toro Gold for US$ 274 million (US$130 million cash and 142.5 million Resolute shares).

Toro Gold’s flagship asset is the low-cost, high-margin Mako Gold Mine (Mako) located in Senegal. In 2018, Mako produced 156,926 ounces (oz) of gold at an All-In Sustaining Cost (AISC) of US$655/oz. The addition of Mako expands Resolute’s existing portfolio comprising the Syama Gold Mine in Mali (Syama), the Bibiani Gold Mine in Ghana (Bibiani), and the Ravenswood Gold Mine in Australia (Ravenswood). Mako will expand Resolute’s production base, strengthen operational cashflow, increase revenues to which shareholder dividends are linked, and provides a strong platform for further growth.

Resolute has revised its FY19 (31 December) production and cost guidance to 400,000oz of gold at an AISC of US$960/oz which includes production from Mako from acquisition.

Under the terms of the Implementation Agreement, Resolute will acquire all of the shares of Toro Gold by way of a takeover under the Companies (Guernsey) Law 2008 for US$274 million comprising US$130 million of cash and 142.5 million freely tradeable Resolute shares valued on Resolute’s 30-day volume weighted average price (VWAP) of A$1.45 per share equating to US$144 million (Transaction). The cash component has been fully funded through a finance facility provided by Taurus Funds Management Pty Limited (Taurus). On completion of the Transaction, Toro Gold shareholders will own 15.8% of Resolute.

Resolute’s largest shareholder, ICM Limited, is strongly supportive of the Transaction. 94% of Toro Gold shareholders have signed commitments to accept the takeover offer and all required regulatory approvals have been secured.

Resolute Managing Director and CEO, Mr John Welborn, confirmed the acquisition of Toro Gold was consistent with the Company’s ambition to create a multi-mine, low-cost, African-focused gold producer:

“The Mako Gold Mine is a high quality, strongly cashflow generative producing asset which complements our existing portfolio of large-scale, long-life mines. The Toro Gold team discovered the Mako orebody in 2010 and have successfully developed a high value gold mine. We are delighted to combine our businesses. Senegal is an attractive investment jurisdiction for mining, and we look forward to working closely with the Government of Senegal, our 10% partner at Mako, to maximise the value within Toro Gold’s portfolio.”

“Resolute has produced over eight million ounces of gold from nine mines over the last 30 years. The Mako Gold Mine will be our tenth operating mine and one which forms an important part of our next phase of growth. The acquisition also confirms our commitment to creating a leadingu African gold producer. Mako’s additional low-cost gold production provides a solid growth foundation that will enable us to deliver compelling value for our shareholders.”

Toro Gold Chief Executive Officer and Founder, Mr Martin Horgan, was pleased to be combining Toro Gold with Resolute: “Resolute’s acquisition of Toro Gold provides Toro Gold shareholders with the unique opportunity of realising immediate value for their Toro Gold shareholding in the form of partial cash consideration while becoming part of a premier African gold producer as shareholders of Resolute. The contribution of our world class Mako Gold Mine to Resolute’s high quality portfolio of large scale, long life assets creates a compelling African gold investment proposition under the stewardship of an excellent and proven management team which will further maximise value for shareholders”.

Edited by Nayyar Iqbal

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