Endeavour Mining (“Endeavour” or the “Company”) has announced the successful completion of the acquisition of Teranga Gold Corporation to create a new top-10 global gold producer.
Sebastien de Montessus, President and CEO said: “We are delighted to successfully complete our acquisition of Teranga and would like to welcome the teams at the Sabodala-Massawa and Wahgnion mines to our organization. We look forward to quickly integrating our new assets into our West African operating platform and delivering on the anticipated material synergies”.
“Following our recent transformative acquisitions, we are now entering a new chapter of the Company’s history. Leveraging off our strategic position as the largest gold producer in West Africa’s highly prospective and under-explored Birimian Greenstone Belt, we believe that we now have all the attributes required to create sustainable shareholder value over the long term.
“Our production base is diversified across six core operating mines in three countries. We have an industry-leading development pipeline of six greenfield projects and the largest exploration portfolio in the region. And lastly, our business is underpinned by a healthy balance sheet and strong cash flow generating capabilities to support our recently initiated sustainable dividend.
Given the significant potential within our portfolio, our sole priority in 2021 is to unlock value organically through mine life extensions, asset optimisation initiatives, and by advancing our brownfield and greenfield projects through studies and further exploration.
“Our corporate efforts are being focused on maximising shareholder returns, with the goal of augmenting our shareholder return program which may include increasing our dividend or initiating a share buyback program as part of our capital allocation framework. We believe that our re-rating potential is also underpinned by our enhanced combined capital markets profile, with greater scale and liquidity to attract generalist investors. In addition, investor appeal is expected to be further increased with our upcoming listing on the Premium segment of the London Stock Exchange in late Q2-2021, targeting inclusion in the FTSE indices.”
Michael Beckett, Chairman of the Board of Directors of Endeavour said: “I would like to congratulate both management teams for their dedication in making this transaction a success, as we now turn our focus to the important business of delivering the long-term benefits for shareholders. To accommodate the transaction terms, HélèneCartier has agreed to step down as a director of Endeavour; while we regret to see her leave, we wish her well in the future, and we thank her sincerely for her invaluable service and contribution to the Endeavour Board since joining. On behalf of the Board of Endeavour, I would like to welcome Bill Biggar, David Mimran and Frank Wheatley as the non-executive director nominees of Teranga.”
Transaction Information
Pursuant to a court-approved Plan of Agreement (the “Arrangement”), shareholders of Teranga received 0.47 of an Endeavour ordinary share (“Endeavour Share”) for each Teranga common share (“Teranga Share”) held, resulting in the issuance of 78,766,690 Endeavour Shares, with Endeavour now having a total of 243,006,939 Endeavour Shares outstanding.
As a result of the Arrangement, Teranga has become a wholly-owned subsidiary of Endeavour. The common shares of Teranga will be delisted from the TSX and the OTCQX on or about February 16, 2021.
Endeavour will also apply to have Teranga cease to be a reporting issuer (or equivalent thereof) in all applicable Canadian jurisdictions. As such Teranga will not be required to report financial results for the period ended December 31, 2020.
Along with the completion of the Teranga acquisition, Endeavour has closed the previously announced $800 million debt refinancing package. The refinancing consists of an amendment and extension of Endeavour’s existing $430 million revolving credit facility (“RCF”) and a $370 million bridge facility (“Bridge”).
The amended RCF will bear interest at the same rate as previously, at LIBOR plus a margin between 2.95% and 3.95%, on a sliding scale depending on leverage. The Bridge will bear interest at 2.25%, increasing by 0.5% every six months until both facilities mature in January 2023. The refinancing proceeds have been used to retire Teranga’s various higher cost debt facilities. Endeavour intends to downsize its Bridge and/or RCF facilities following the closing of the $200 million La Mancha investment.
The La Mancha investment, representing 8,910,592 common shares, is expected to close during the quarter. Following the investment, Endeavour will have approximately 251,917,531 common shares outstanding with La Mancha holding an interest of approximately 19%.
Upon closing of the Transaction, Hélène Cartier has retired from Endeavour’s Board of Directors and William Biggar, Frank Wheatley and David Mimran, all nominees of Teranga, are joining Endeavour’s Board of Directors.
To ensure an efficient integration of Teranga’s assets into Endeavour’s West African operating model, certain senior managers from Teranga will join Endeavour’s integration team for a transition period.
The Company intends to publish a consolidated 2021 guidance, detailing production, AISC, capital and exploration spend for the Teranga assets in the coming weeks.
