Energy & Mining



Eldorado Gold Corp (USA) (NYSE:EGO) has signed a definitive agreement for the acquisition of INTEGRA GOLD CORP COM STK CAD1 (OTCMKTS:ICGQF). The cash and stock transaction allows shareholders to choose between receiving Eldorado Gold stock, cash, or a combination of the both.

Terms of Agreement

Eldorado Gold Corp (USA) (NYSE:EGO) has agreed to issue 77 million shares to pay a maximum of C$129 million to shareholders who choose the cash option. The transaction values the company at C$590 million given that Eldorado will pay C$1.1215 per share of INTEGRA GOLD CORP COM STK CAD1 (OTCMKTS:ICGQF), representing a 52% premium.

The transaction awaits shareholders’ approval after Integra directors unanimously approved the deal. However, the board can terminate the deal in favor of a superior proposal. By terminating the current deal, the company will also have to pay Eldorado C$18 million in termination fees. Eldorado will also be given a three-day window to match any opposing offer.

Under the current terms of the agreement, the transactions should close in July 2017 and no later than August 30, 2017. Completion of the transaction will see INTEGRA GOLD CORP COM STK CAD1 (OTCMKTS:ICGQF) shareholders owning 10% of Eldorado’s stock.

“Our supportive shareholders realize immediate value for their investment in Integra and can maintain exposure to our world-class asset as Eldorado continues the rapid advancement of Lamaque. Our stakeholders in Val-d’Or can leverage off of a well-financed, responsible gold producer who has chosen Québec as the jurisdiction from which they can establish an operating presence in Canada, “said Integra CEO Stephen de Jong.

Lamaque Project Factor

Eldorado Gold Corp (USA) (NYSE:EGO), which currently owns 12.8% of outstanding shares of INTEGRA GOLD CORP COM STK CAD1 (OTCMKTS:ICGQF), is pushing for a merger as a way of adding the Lamaque project to its portfolio. The project presents a high-quality development opportunity given its production capacity and cash flow prospects. The acquisition also presents the company an opportunity to further expand its footprint in Canada.

Eldorado Gold Corp (USA) (NYSE:EGO) stock came under pressure in the market after announcing the deal. The fact that the company is paying a 52% premium for the 87% of integral Gold it does not own has not gone well with some experts. Integra shares, on the other hand, surged by more than 40% on the news given the high premium.

INTEGRA GOLD CORP COM STK CAD1 (OTCMKTS:ICGQF) stock was little changed in Thursday trading session having rallied by 1.01% to close the day at highs of $0.8212 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance


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James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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