Iamgold, Repadre ready to combine

Two of the smaller but richer companies in the gold business, Iamgold (IMG-T) and Repadre Capital (RPD-T), have announced plans to merge in an all-share transaction that would see Repadre shares traded for 1.6 Iamgold shares.

Iamgold, whose principal assets are non-operating interests in the Sadiola Hill and Yatela gold mines in western Mali, and Repadre, which has a portfolio of gold and diamond royalty interests as well as an 18.9% interest in the Tarkwa gold mine in Ghana, would have combined annual production of 450,000 oz. Their attributable reserves are about 3.4 million oz.

The companies’ merger agreement includes a due-diligence period ending on Nov. 29, and Repadre shareholders would be presented with a merger proposal at a special meeting in January. Holding company Dundee Bancorp, which holds a 16.6% interest in Repadre, has already agreed to vote in favor of the merger. Iamgold’s co-chairmen, William Pugliese and Mark Nathanson, have also agreed to vote their shares in favor of the merger.

Repadre’s president Joseph Conway would take over as president and chief executive officer of the combined company, with Iamgold chief operating officer Todd Bruce remaining in his present capacity. Pugliese and Nathanson would become co-chairmen of the new company’s board, which three current Repadre directors would join.

The merger will require regulatory and shareholder approval, and both boards are getting fairness opinions. Should the merger not go through, there are reciprocal break fees of $5 million.