Resolute Mining (ASX:RSG) today announced that it was in the process of acquiring Toro Gold, a private mining company with operations in some African countries including Senegal, in a move that proves that mergers among gold miners are far from over.
There is no doubt that Resolute Mining is acquiring Toro Gold in order to get access to its Mako gold mine, given Resolute’s wide experience in the West African mining sector, except in Senegal where the mine is located.
Resolute is on an expansion drive given that it got fully listed on the London Stock Exchange earlier this year and it is quite likely that the acquisition of Toro Gold was a crucial part of its growth strategy.
The deal, worth $300m, will be funded partly by a $170m share swap agreement where Toro Gold shareholders will receive Resolute shares, while the remaining $130m will be settled via a direct cash payout to Toro Gold shareholders.
Both firms define the terms of the agreement in a slightly different manner in order to appeal to their shareholders, regardless, the merger is good for both companies.