Lake Shore Gold to buy West Timmins for $292 million
28 Aug 2009
Canadian gold mine developer, Lake Shore Gold Corp. (Lake Shore) is acquiring West Timmins Mining Inc. (West Timmins), another North American gold explorer for $292 million in a share swap deal, augmenting consolidation in the gold mining sector.
Both the companies announced yesterday signing of a definitive business combination agreement under which Lake Shore will buy all of the outstanding shares of West Timmins by offering West Timmins shareholders 0.73 shares of Lake Shore for each share of West Timmins.
The proposed valuation works out to C$2.28 per share of West Timmins, compared to a closing price of C$2.20 Wednesday on Toronto Stock Exchange, representing a premium of 3.6 per cent.
The deal closely follows another $1.8 billion takeover bid on Wednesday in the gold mining sector by Canada's Eldorado Gold Corp. targeting China focused Sino Gold of Australia. (See: Eldorado to acquire Sino Gold for $1.8 billion)
Vancouver-based West Timmins is a mineral exploration and development company, focusing on district-scale gold projects in North America. Recently, West Timmins discovered promising high-grade properties in Thunder Creek joint venture in Timmins, Ontario in which the company owns 40 per cent stake, and Lake Shore, 60 per cent.
The company is also active in large scale gold exploration projects in Mexico's prolific Sierra Madre Gold Belt.
