OceanaGold to acquire Romarco for its U.S.-based gold project

Thu Jul 30, 2015 11:30am EDT
 
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July 30 (Reuters) - Australian-Canadian miner OceanaGold Corp has agreed to buy Romarco Minerals Inc for around C$856 million ($657.20 million), getting its hands on a low-cost gold mine that is being built in a low-risk jurisdiction.

Romarco is building an open-pit gold mine at its Haile Gold project in South Carolina, which is expected to produce around 540,000 ounces of gold a year by 2017 at an all-in sustaining cost of less than $600 an ounce.

That compares to a gold price on Thursday of $1,093 an ounce.

The all-share deal, equal to 68 Canadian cents a Romarco share, is a 73 percent premium on Romarco's closing share price on Wednesday. OceanaGold shareholders will end up with 51 percent of the enlarged company, and Toronto-listed Romarco the rest.

OceanaGold brings to the deal free cash flow from its existing operations and access to lower-cost financing that will help to fund construction of the Haile mine at a time when mine financing is expensive due to weak metals prices.

The deal includes a C$34 million termination fee.

National Bank Financial acted as OceanaGold's financial advisor. RBC Capital Markets was Romarco's.

($1 = 1.3025 Canadian dollars) (Reporting by Nicole Mordant in Vancouver; Editing by David Gregorio)