Miner Tahoe Resources adds Ontario gold mines with Lake Shore buy
(Reuters) - Miner Tahoe Resources Inc (TAHO.N: Quote) (THO.TO: Quote) said it would buy Canada's Lake Shore Gold Corp LSG.TO for about C$751 million ($540 million) to add low-cost gold mines in Ontario to its portfolio.
Precious metals miners have been clamping down on costs amid a sharp decline in the price of bullion that has weighed on exploration spending, capital to sustain operations and dividends.
Spot gold prices XAU= have fallen nearly 40 percent from its peak of $1,920.30 an ounce in September 2011.
The deal comes after Goldcorp Inc (G.TO: Quote) sold its 25.6 percent stake in Tahoe for C$998.5 million last June.
Tahoe had also bought smaller rival Rio Alto Mining Ltd RIO.TO in a cash-and-share deal valued at C$1.4 billion last February to expand its presence in Latin America.
Lake Shore Gold operates Timmins West and Bell Creek mines in Timmins, Ontario, while Tahoe has a mine in Guatemala and two mines in Peru.
"The combination with Lake Shore Gold enhances Tahoe's position as the new leader in precious metals by adding another low-cost operation in Timmins, one of the most prolific gold camps in the world," Tahoe Executive Chairman Kevin McArthur said in a statement.
Tahoe will pay 0.1467 of its stock for each Lake Shore Gold share. The offer works out to C$1.71, a 15 percent premium to Lake Shore shares, based on both stocks' Friday close.
Lake Shore had 439.23 million shares outstanding as of Sept 30, according to a regulatory filing. Continued...