Mariana Resources agrees to be taken over in a deal that values gold digger at £167mln

Mariana Resources PLC (LON:MARL), the Turkey-focused mining exploration specialist, has agreed to be taken over in a deal that values the business at almost £167mln, representing an 84% premium on last night’s valuation.

Canada-listed Sandstorm Gold, which already owns 7% of the AIM-listed company, is offering its own paper as well as 28.75p per share in cash.

This values Mariana stock, which closed at 59.01p on Wednesday, at 109.71p, and the company at £166.85mln.

The deal has the backing of the Mariana board. Chairman John Horsburgh said: “The terms of the combination represent a significant and attractive premium to the market price of Mariana shares.”

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The company’s major asset is a 30% stake in the Hot Maden copper-gold project in Turkey.

One of the highest grade deposits in the world today, it is host to 3.45mln gold equivalent ounces.

In January the company revealed the findings of a preliminary economic assessment of Hot Maden, which estimated its net present value to be US$1.37bn.

The projected cash flows from a mine are so strong the payback on the investment would be just over two years.

Upfront costs were estimated at US$169mln, which rises to US$261mln over the mine’s life.

“The combination with a company such as Sandstorm not only de-risks Mariana’s exposure as a single development-production asset company but provides a stronger diverse platform and ability to finance the development of the 30% owned high grade gold-copper discovery at Hot Maden in Turkey,” said Horsburgh.
 

Story by ProactiveInvestors