semafo
Gold deal signed

SEMAFO and Savary Gold have entered an agreement pursuant to which SEMAFO will acquire all shares of Savary not already owned by it.

The transaction is being carried out by way of a three-cornered amalgamation.

Savary shareholders will vote on the Amalgamation at a special meeting of Savary shareholders with closing expected to take place by the end of April 2019.

Benoit Desormeaux, President and CEO of SEMAFO, states, "Our acquisition of the Karankasso property reflects our core strategy of creating long-term value through developing and operating high quality assets.

"The acquisition provides a consolidated district-scale land package in a country we know well and on the prolific Houndé Greenstone Belt, which we also know very well.

"We see excellent potential for resource growth on the combined 1,250 km², and when this transaction is consummated we anticipate the combined property will head up our development pipeline."

Don Dudek, President and CEO of Savary, says, "Over the past few years, Savary has delivered on its commitment to create value for its shareholders through its disciplined approach to exploration and resource development.

"The transaction with SEMAFO is consistent with that commitment as our shareholders will benefit from having ownership in an intermediate, multi-mine producer with a portfolio of high-quality assets and a proven and experienced management team that shares our commitment to creating long-term sustainable value.

"On closing, our shareholders can maintain exposure to the district-scale land package as it becomes one of SEMAFO's top development pipeline projects."

Transaction highlights:

  • District-Scale Land Package - Consolidated properties become ~50 km by ~25 km, which creates a district-scale, target-rich, land package
  • Entire 1,250 km² Truckable to Central Plant - Ore from the entire consolidated land package could be trucked to a central plant, given a current tentative plant location in the north west of SEMAFO property. Economic trucking distance is ~25km depending on grade and recovery.
  • Significant Consolidated Resource Base - Combination of existing mineral resources (Savary's Karankasso hosts inferred resources of 12.3 Mt at 2.03 g/t Au for 805,000 oz; SEMAFO's Bantou has inferred mineral resources of 2.1 Mt grading 5.35 g/t Au for 361,000 oz) into a consolidated resource estimation post-closing will provide a significant base on which to expand.
  • Excellent Location on Prolific Houndé Greenstone Belt – The district-scale land package is located on the prospective Houndé Greenstone Belt that hosts Mana and many other operating mines.
  • Accelerated Resource Growth – The 2019 consolidated exploration program will focus on accelerated resource growth on a consolidated basis and will be announced post-closing.

Benefits to SEMAFO Shareholders:

  • Creation of a district-scale 1,250 km² land package with proven exploration and development potential
  • Excellent location on the prospective Houndé Greenstone Belt
  • Good alignment with SEMAFO's core competencies of increasing resources, developing reserves, completing economic studies, and constructing/operating a third gold mine
  • Further strengthening of SEMAFO's exploration and development pipeline
  • Lower exploration and development risk as Burkina Faso is a country where SEMAFO is well-established and understands how to operate
  • Minimal 2.2% dilution

Benefits to Savary Shareholders:

  • Significant immediate value and premium
  • Diversified ownership in SEMAFO's high-quality portfolio of assets
  • Continued exposure to combined properties' district-scale exploration upside potential
  • SEMAFO has the in-house capabilities and balance sheet to significantly advance the 1,250 km² district-scale potential
  • Significant improvement in trading liquidity and capital markets exposure