Canada-based Aura Minerals has entered into a definitive arrangement agreement with Bluestone Resources to acquire all issued and outstanding common shares of the latter.
The transaction, with a total enterprise value of up to $74.3m, will see Aura taking over Bluestone's Cerro Blanco gold project and the Mita Geothermal project.
The acquisition values Bluestone at approximately C$0.50 ($0.35) per share, a 51% premium to the spot price and a 40% premium to the 25-day volume weighted average price on the TSX Venture Exchange, as of 24 October 2024.
Bluestone shareholders will have the option to receive upfront consideration on closing in either cash or Aura shares or a combination of both, subject to proration, along with a contingent value right for potential future cash payments.
Closing of the transaction is anticipated for January 2025, contingent upon meeting all closing conditions.
Cerro Blanco is a high-grade gold deposit located in Jutiapa, Guatemala, with a technical report filed in April 2022. The Mita Geothermal project is licensed to produce up to 50MW of power.
Bluestone has addressed concerns from the Guatemalan Ministry of Environment regarding the approval procedure for the mining method at Cerro Blanco, asserting adherence to legal standards.
Aura Minerals CEO Rodrigo Barbosa said: "We can refine our strategic approach to make Cerro Blanco another flagship project that exemplifies the utmost respect for social and environmental responsibilities while delivering value to all stakeholders."
Bluestone Resources president, CEO, and board chair Peter Hemstead said: “After a fulsome Strategic Review Process, the acquisition by Aura provides the best outcome for Bluestone shareholders and to further advance the Cerro Blanco gold project and Mita geothermal project.
“The transaction presents shareholders with a choice to maintain exposure to Cerro Blanco through a proven Latin America mine developer and producer with a strong balance sheet or elect cash.”
The boards of directors of both companies have unanimously approved the arrangement, with Bluestone's board recommending that security holders vote in favour of the transaction.
GenCap Mining Advisory has provided a fairness opinion, with various legal advisors being involved for both parties.
