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Fortuna Silver (TSX:FVI) to acquire Roxgold (TSX:ROXG)
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  • Fortuna Silver (FVI) and Roxgold (ROXG) have agreed to a business combination, creating an intermediate global precious metals producer
  • Roxgold shareholders will receive 0.283 Fortuna common shares and C$0.001 for each Roxgold common share held
  • The exchange ratio implies a consideration of C$2.73 per Roxgold common share totaling C$1.1 billion
  • The combined company expects to produce 450,000 ounces of gold per year with an AISC of US$950 per gold equivalent ounce
  • Roxgold is a Canadian-based gold mining company with assets located in West Africa
  • Roxgold (ROXG) is up by 14.58 per cent and is currently trading at $2.20 per share
  • Fortuna Silver Mines is a Canadian precious metals mining company with operations in Peru, Mexico and Argentina
  • Fortuna Silver (FVI) is down by 16.08 per cent and is currently trading at $8.09 per share

Fortuna Silver (FVI) and Roxgold (ROXG) have agreed to a business combination, creating an intermediate global precious metals producer.

The companies have entered into a definitive agreement whereby Fortuna will acquire all of Roxgold's issued and outstanding securities.

Roxgold shareholders will receive 0.283 Fortuna common shares and C$0.001 for each Roxgold common share held.

The exchange ratio implies a consideration of approximately C$2.73 per Roxgold common share, representing a 42.1 per cent premium to its closing price on the TSX on April 23, 2021.

The implied fully-diluted equity value of the transaction is approximately C$1.1 billion.

Upon completion of the transaction, existing Fortuna and Roxgold shareholders will own approximately 64.3 per cent and 35.7 per cent of the pro forma company, respectively.

The transaction is expected to close in late June or early July 2021.

Transaction Highlights

  • Anticipated annual gold equivalent production of approximately 450,000 ounces
  • Projected pro-forma average annual EBITDA of over US$500 million
  • AISC of approximately US$950 per gold equivalent ounce with a declining cost profile
  • Extensive brownfield and greenfield organic growth potential supported by a large base of mineral reserves and resources in Latin America and West Africa
  • Lower cost of capital and strong balance sheet to fund the construction of the Séguéla Gold Project in Côte d’Ivoire and advanced exploration of the Boussoura Gold Project in Burkina Faso
  • Significantly higher liquidity, greater scale and enhanced capital markets relevance to compete for meaningful assets in West Africa and the Americas
  • Fortuna will continue to pursue meaningful and accretive silver opportunities
  • Roxgold shareholders will maintain significant exposure to Roxgold's portfolio assets through ownership in Fortuna

Jorge A. Ganoza, Fortuna's President and CEO, commented,

"The combined company will be in a stronger position to continue accelerating the development of the Séguéla Gold Project at a lower cost of capital and aggressively pursuing the potential of a most exciting exploration pipeline in West Africa and Latin America.

At Fortuna, we have known and followed the success of the Roxgold team for a number of years, from their early start at Yaramoko, and now look forward to working together and continuing to deliver value to our shareholders through the advancement of our assets and discovery."

John Dorward, Roxgold's President and CEO, commented,

"This transaction recognizes the commitment and execution of the Roxgold team and the value creation over recent years, as we advanced from developer to low-cost gold producer with a growth pipeline that few of our peers could match.

The combination with Fortuna provides our shareholders with an immediate premium and a unique opportunity to participate in the creation of a new global mid-tier precious metals producer with significant organic growth and cash flow-generating potential."

Roxgold is a Canadian-based gold mining company with assets located in West Africa. 

Roxgold (ROXG) is up by 14.58 per cent and is currently trading at $2.20 per share as of 11:21 am ET.

Fortuna Silver Mines is a Canadian precious metals mining company with operations in Peru, Mexico and Argentina.

Fortuna Silver (FVI) is down by 16.08 per cent and is currently trading at $8.09 per share as of 11:21 am ET.

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