China-based Yintai Gold has reached an agreement with Canadian gold exploration company Osino Resources to acquire all outstanding Osino common shares in a deal valued at around C$368m ($272.35m), or C$1.90 per share.
This will result in Yintai owning Osino’s gold assets in Namibia, including the Twin Hills Gold Project.
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The buyout offer from Yintai was deemed a “Superior Proposal” by Osino, leading to the termination of a prior agreement with Dundee Precious Metals (DPM).
It represents almost a 32% premium over the DPM agreement and an around 68% premium to Osino’s share price before the DPM agreement announcement.
Yintai has facilitated the development of Osino’s Twin Hills project by providing a loan of around $10m, alongside covering the termination fee incurred from the dissolved DPM agreement.
Yintai president Xingong Ou said: “Twin Hills represents a unique opportunity to add a high-quality gold development asset to our portfolio in a stable and mining-friendly jurisdiction.
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By GlobalData“The project provides the foundation for our future production profile with production targeted for 2026, as well as significant exploration upside.”
Osino’s board of directors and the special committee have unanimously approved the transaction with Yintai, recommending that shareholders vote in its favour.
Osino president and CEO Heye Daun said: “Whilst we were appreciative of the previous offer from DPM, the all-cash offer from Yintai represents a significant premium to the DPM offer price, thus is clearly a superior proposal, and is an excellent outcome for Osino’s shareholders.
“Yintai is experienced, well-financed and has a highly credible track record of gold mining in China, with the technical skills and financial resources to progress the project through construction and into production.”
The agreement includes provisions for board support, non-solicitation covenants and a fiduciary out clause, allowing Osino to consider superior offers with a right to match for Yintai.
It stipulates termination fees payable by Osino to Yintai and vice versa under specified conditions.
Expected to conclude in the first half of 2024, the deal is currently pending regulatory approvals. Following the closure, Osino shares will be delisted.
