IAMgold (IMG.TO, IAG) announced yesterday it made an offer to acquire all remaining shares of EURO Ressources (EUR on Euronext Paris) it doesn’t own yet for 2.84 EUR in cash, a 31.5% premium. As IAMgold already owns 86% of EURO Ressources, acquiring the remaining shares will cost the company less than C$40M.
This deal is important for Columbus Gold (CGT.V). As you might remember, EURO Ressources used to own a 10% royalty on Paul Isnard, but Columbus has renegotiated this deal and reduced the 10% NSR to just 1.8% after making a payment in cash and shares. According to EURO’s financial report after the first semester of this financial year, the company still owns approximately 19.1 million shares of Columbus Gold which is approximately 13.48% of the company. On top of that, EURO also still holds a 1.8% NSR on the property (declining to 0.9% after the first two million ounces) and this will now also be transferred to IAMgold upon completion of the buyout.
This means that IAMgold will now suddenly become one of Columbus Gold’s main shareholders and that could make things very interesting considering IAMgold has to spend half a billion dollar in cash by January next year after the sale of the Niobec project. This deal could make Nordgold a bit nervous and IAMgold wouldn’t have the slightest problem with operation a mine in French Guyana. After all, the company used to own Camp Caiman before it was shut down, and IAMgold is still operating its 95%-owned Rosebel gold mine in Suriname, just 100 kilometers away from the Paul Isnard project.
Needless to say IAMgold has sufficient experience with the Guyana shield and consolidating Euro Ressources might be the first step of a mating ritual with Columbus Gold.
Disclosure: The author holds a long position in Columbus Gold. Columbus is a sponsor of the website. Please see our disclaimer for current positions.
