IAMGOLD Corp (USA) (NYSE: IAG) reports that the Company has signed a definitive agreement with Merrex Gold Inc. (“Merrex”) to acquire, in an all-share transaction, all of the issued and outstanding shares of Merrex not already owned by IAMGOLD (the “Transaction”).
Merrex is a junior mineral exploration company of which IAMGOLD currently owns approximately 45.8 million or 23% of Merrex’s issued and outstanding 199.2 million common shares. IAMGOLD expects to issue 6.9 million shares, amounting to less than 1.5% of its issued and outstanding shares, in connection with the Transaction. The Transaction is expected to close in the first quarter of 2017.
“This agreement consolidates the ownership of a key asset in IAMGOLD’s exploration pipeline,” said Steve Letwin, IAMGOLD’s President & CEO. “The IAMGOLD exploration team, led by Craig MacDougall, working in concert with Merrex on the Diakha-Siribaya project in Mali has done an outstanding job over recent years to define indicated resources of 2.1 million tonnes grading 1.90 g/t Au for 129,000 ounces and inferred resources of 19.8 million tonnes grading 1.71 g/t Au for 1.1 million ounces. Mali is a prolific mining friendly jurisdiction and is where IAMGOLD began nearly 25 years ago at the Sadiola project which, along with its neighbouring Yatela mine, has already produced over 7.5 million ounces of gold.”
Merrex’s primary assets are its gold properties in West Mali, principally its 50% interest in the Siribaya Gold Project, its 100% held Karita exploration authorization in Guinea and its 100% held zinc-lead property in Nova Scotia (the Jubilee Project). Merrex holds permits totaling approximately 700 square kilometers within an approximately 4,100 square kilometers area of interest in the southern portion of the West Mali Gold Belt.
The Transaction will proceed by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia). The companies expect to close the Transaction following required securityholder, court and regulatory approvals and satisfaction of certain other customary closing conditions. (Original Source)
Shares of IAMGOLD Corp are currently falling 0.60% to $3.31, or down $0.02 in pre-market trading Thursday. IAG has a 1-year high of $5.87 and a 1-year low of $1.15. The stock’s 50-day moving average is $3.78 and its 200-day moving average is $4.15.
On the ratings front, IAMGOLD Corp has been the subject of a number of recent research reports. In a report issued on November 25, Credit Suisse analyst Anita Soni reiterated a Hold rating on IAG, with a price target of $5, which represents a potential upside of 50% from where the stock is currently trading. Separately, on November 8, TD Securities’ Steven Green upgraded the stock to Buy .
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Anita Soni and Steven Green have a yearly average loss of -4.2% and -18.2% respectively. Soni has a success rate of 31% and is ranked #3734 out of 4289 analysts, while Green has a success rate of 25% and is ranked #3681.
IAMGOLD Corp. is engaged in the exploration, production and development of gold and mineral resource properties throughout the world. The company is focused on exploring for copper, gold, silver, niobium, diamonds and zinc deposits in West Africa, South America and in the Canadian provinces of Ontario and Québec, where it also operates a niobium mine. Its gold projects include Essakane, Rosebel, Westwood, Mouska, Côté as well Rare Earth Elements projects all in Canada; Boto project in Senegel and Pitangui Project in Brazil.