SEMAFO (TSX: SMF) (OMX: SMF) and Savary Gold (TSX-V: SCA) announced today that they have entered into a definitive combination agreement pursuant to which SEMAFO will acquire all of the issued and outstanding common shares of Savary not already owned by it.
In a press release, the companies explained that the transaction is being carried out by way of a three-cornered amalgamation, which will be voted upon by Savary shareholders. Closing is expected by the end of April.
They also said that under the terms of the Combination Agreement, Savary shareholders will receive 0.0336 of a SEMAFO common share for each Savary Share.
Once the deal goes through, it would allow for the consolidation of both companies’ properties in Burkina Faso’s Houndé Greenstone Belt. In that area of the western part of the West African country, Savary operates the Karankasso gold project, which is located right next to SEMAFO’s Mana mine. This means that the consolidation will result in a district-scale, target-rich, land package.
According to the Canadian firms, the deal would also allow them to consolidate the resource estimation of their existing mineral resources and will provide a significant base on which to expand. Savary’s Karankasso mine hosts inferred resources of 12.3 Mt at 2.03 g/t Au for 805,000 oz, while SEMAFO’s Bantou mine has inferred mineral resources of 2.1 Mt grading 5.35 g/t Au for 361,000 oz.
“We see excellent potential for resource growth on the combined 1,250 square kilometres, and when this transaction is consummated we anticipate the combined property will head up our development pipeline,” Benoit Desormeaux, President and CEO of SEMAFO, said in the media brief.