Goldgroup Mining Inc. announced that it has entered into a definitive arrangement agreement and plan of merger with Gold Resource Corporation, under which Goldgroup has agreed to acquire all of the issued and outstanding shares of Gold Resource.
The transaction values Gold Resource’s common stock at approximately US$372 million on a fully diluted, in-the-money basis.
Under the arrangement agreement, Gold Resource stockholders will receive 1.4476 Goldgroup common shares for each share of Gold Resource common stock. This exchange ratio will be adjusted to 0.3619 Goldgroup common shares per Gold Resource share as a result of a four-for-one share consolidation that Goldgroup expects to complete prior to closing.
This transaction brings together two producing mining companies to create a larger, more diversified mining company with a strong focus on Mexico. The combined company’s assets will include Gold Resource’s producing Don David Gold Mine in Oaxaca, Mexico and the advanced-stage Back Forty Project in Michigan, USA, and Goldgroup’s Cerro Prieto Mine and recently acquired past producing San Francisco Mine. Both the Cerro Prieto and San Francisco mines are located in Sonoro State, Mexico.
Fort Capital provided an independent fairness opinion to the Special Committee of Goldgroup.
Read the full media release here.