Toronto, Canada — MININGREVIEW.COM — 15 December 2008 – Iamgold Corporation – a top mid-tier gold producer, with annual production of close to 1 million ounces from eight operations in North America, South America and Africa – has agreed to buy Orezone Resources in an all-stock deal worth about US$139 million (R1.4 billion), which will boost its West African production base and lower its mining costs.
In an announcement here, Iamgold said the takeover – which would give it control of Orezone’s Essakane project in Burkina Faso – would push it further along towards its goal of doubling its annual gold output to 1.8 million ounces by 2012.
“It represents an accretive transaction which lowers our costs and allows us to acquire a quality reserve and resource base,” said Iamgold chief executive Joseph Conway during a conference call.
The announcement revealed that Orezone’s exploration properties not related to Essakane would be spun out into a new exploration company called New Orezone, in which Iamgold would hold a 16.6% stake.
It added that Orezone shareholders would receive 0.08% of an Iamgold share and a pro rata share of New Orezone for each Orezone share. Iamgold said the deal represented a value of about 49 Canadian cents for each Orezone share, based on Wednesday closing prices.