Fortuna Silver to acquire Roxgold – Mining Review

Image: 123rf.com

TSX-listed Fortuna Silver Mines has announced that it will acquire Canadian-based gold mining company, Roxgold.

Roxgold owns and operates the high-grade Yaramoko Mine Complex located on the Houndé greenstone belt in Burkina Faso and is also advancing the development and exploration of the Séguéla gold project in Côte d’Ivoire.

Fortuna Silver is precious metals mining company with operations in Peru, Mexico and Argentina.

The acquisition will create a low-cost platform for gold and silver production growth in the world’s fastest growing precious metals producing regions.

Read: Séguéla project readies itself for 2022 gold production

The benefits of the transaction include:

  • Anticipated annual gold equivalent production profile of approximately 450 000 oz;
  • AISC of approximately US$9505 per gold equivalent ounce with a declining cost profile;
  • Extensive Brownfields and Greenfields organic growth potential supported by a large base of mineral reserves and mineral resources in Latin America and West Africa; and
  • Lower cost of capital and strong balance sheet to fund the construction of Séguéla, advance exploration of the Boussoura gold project in Burkina Faso as well as other organic and external growth opportunities.

READ MORE ARTICLES ON GOLD

A complete business platform

The deal brings together two highly experienced management teams with track records of value creation in the Americas and in West Africa: Fortuna will benefit from the in-region operating experience of key members of Roxgold’s team.

It further creates a diversified, complementary portfolio of four quality operating assets and a development project in prolific jurisdictions with a projected pro forma average annual EBITDA of over $500 million.

Podcast: Gold outlook 2021

Jorge A. Ganoza, president and CEO of Fortuna, commented: “With Roxgold we are acquiring a complete business platform which brings: i) low-cost gold production; ii) a permitted feasibility stage development project; iii) a robust exploration pipeline; and iv) key members of a seasoned executive team of proven mine builders, developers, and explorers in West Africa.

“The combined company will be in a stronger position to continue accelerating the development of the Séguéla gold project at a lower cost of capital and aggressively pursuing the potential of a most exciting exploration pipeline in West Africa and Latin America.”

John Dorward, president and CEO of Roxgold added: “This transaction recognises the commitment and execution of the Roxgold team and the value creation over recent years, as we advanced from developer to low-cost gold producer with a growth pipeline that few of our peers could match.

“Further, Fortuna’s excellent track record as an operator and mine builder gives us confidence that the combined company will be best positioned to maximise value for all our shareholders,” he concluded.

Sign up to our newsletter