Weak gold prices have induced Eldorado Gold (eld-t) to enter discussions with South African mining house Gencor to revise a proposed transaction involving the acquisition of two operating gold mines and nine exploration projects in Ghana and South Africa.
Eldorado has been hammered in the market since first announcing the deal in early June. The proposed acquisition is valued at US$193.6 million and includes US$140.3 million on closing and up to US$53.3 million payable as deferred compensation (subject to certain conditions).
The transaction was to be settled through a cash payment of US$26.3 million, the issuance of US$50 million in interest-bearing notes, US$109.9 million in Eldorado convertible non-voting shares and US$7.4 million as a 1.5% net smelter return royalty on production from certain properties.
The deal was to include a 45% interest in a proposed merger of the Fairview and ET Cons gold mines in the Barberton area of South Africa, but Eldorado has been advised that Gencor and Avgold have decided not to proceed with the merger.
Eldorado will announce further details as they become available.
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