Endeavour Mining Corporation (TSE:EDV) (OTCQX:EDVMF) (FRA:E5Y1), an ambitious gold producer focused on West Africa, confirmed that it is in discussions with Canada-based Teranga Gold Corp (TSE:TGZ) (OTCMKTS:TGCDF) (FRA:0TGA) regarding a potential merger of equals.
Reuters reported on Tuesday that a merger, if it proceeds, would mark the latest in a series of deals involving the gold-rich region. The news agency said that Endeavour, which is 24.12% owned by Egypt’s Sawiris family, has been on the “acquisition trail this year” as gold prices gained on the back of global stimulus.
“Endeavour confirms that it is in discussions with Teranga regarding a potential merger of equals style combination,” the company said in a statement.
READ: Endeavour Mining eyes top-end output from Boungou mine in Burkina Faso after infrastructure improvements
“These discussions may or may not result in an agreement in respect of a potential transaction. Any transaction would only be pursued if the Board of Endeavour believed that it represented a compelling value creation opportunity,” it added.
In the meantime, Teranga Gold has also acknowledged that it is in discussions with Endeavour regarding a potential “merger of equals structured transaction.”
Teranga Gold is focused on strengthening its position as a low-cost, mid-tier gold producer in West Africa. Teranga’s strategy is to maximize shareholder value by increasing long-term free cash flow through diversification and growth while remaining fiscally conservative.
Further consolidation in West Africa brings with it the possibility of economies of scale which could help miners manage increasing security costs, especially in the Sahel.
Endeavour Mining is headquartered in the Cayman Islands. The firm, which has 2,800 employees worldwide, has 14 million ounces of measured and indicated resources (M&I) and aims to have discovered 10 to 15 million ounces of the precious metal within five years.
Endeavour operates four producing mines across Côte d’Ivoire (Agbaou and Ity) and Burkina Faso (Houndé, Karma).
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