Marathon Gold and Calibre Mining have reached an agreement to merge in a deal with a transaction equity value of 345 million Canadian dollars ($249.9 million). Under the terms of the agreement, Marathon shareholders will receive 0.6164 of a Calibre common share for each of their common shares.
Creating a Combined Entity
The newly combined entity aims to produce approximately 500,000 ounces of gold in 2025 and 2026. This merger will provide shareholders with diversification and exposure to high-quality, long-life production in Newfoundland and Labrador, Canada.
Consideration and Premium
The consideration for Marathon shareholders implies a value of C$0.84 per share, representing a premium of 32% based on the company’s stock spot price at C$0.64 as of Friday.
Ownership Structure
Existing shareholders of Marathon and Calibre will own approximately 66% and 34% of the newly combined company, respectively. The new company is expected to have a cash balance of $148 million and generate significant free cash flow from existing Calibre mines.
Future Prospects
With this merger, the new company expects to have the financial strength to facilitate the seamless construction of the Valentine Gold Project and to continue making exciting discoveries and building resources through exploration in Nicaragua, Nevada, and Newfoundland and Labrador.
As part of the transaction, Calibre has also agreed to purchase 66.7 million common shares of Marathon at C$0.60 per share, securing a 14.2% equity interest in Marathon.
