Canadian secures Australian explorer takeover approval
10 May, 2013 Alex Heber 0 comments
Canadian secures Australian explorer takeover approval Site of the Cerro Del Gallo mine in Mexico.
The Federal Court of Australia has approved Canadian gold and silver producer Primero Mining’s acquisition of junior explorer Cerro Resources.
Primero’s US$118.7 million bid for the precious metals explorer will see it acquire Cerro’s Mexican based Cerro Del Gallo project.
The Cerro Del Gallo gold and silver deposit is located in the Guanajuato province, it has an expected mine life of 14 years, low strip ratio, and estimated production of 94,500 ounces of gold each year at $516 per ounce.
Under the terms of the acquisition, Primero will acquire all issued and outstanding ordinary shares of Cerro Resources on the basis of 0.023 of a Primero share for each Cerro share, Mining Technology reported.
All Cerro's non-Cerro Del Gallo assets will be transferred to Cerro's wholly owned subsidiary Santana Minerals.
Primero first struck a definitive agreement to acquire the company’s asset in December last year.
The acquisition is expected to be finalised later this month.
Cerro Del Gallo’s feasibility study was released last year, and at the time the company said it was continuing with pre construction work, permitting, and gathering funding to meet capital expenditure.
Australian Mining has previously reported that in 2011 it was estimated that there are about 300 to 400 Canadian mining companies were operating in South America.
At the time Dan Sullivan, trade commissioner at the Australian embassy in Lima Peru told Australian Mining that Australian companies were missing out on valuable opportunities.
“The Canadians are all over South America, which means that Australian mining companies are missing out on the opportunities here, and this worries me,” Sullivan said.
Cerro Resources also has two other potential gold and silver exploration projects namely the Namiquipa silver project in the country’s north, and the Espiritu Santo greenfield package in neighbouring Jalisco state to the west of Guanajuato.
“We’re already seeing veins exposed at the surface carrying gold and that’s opportunity,” Cerro Resources managing director Tony McDonald previously told Australian Mining about the Espiritu Santo project.
