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May 22, 2024
PI Global Investments
Precious Metals

Dundee Precious Metals to acquire Osino in $214m deal

Canada-based mining company DPM has reached an agreement to acquire compatriot Osino Resources in a cash-stock deal worth $214m (C$287m).

As per the agreed terms, DPM will acquire all the shares of Osino by paying C$0.775 in cash for a share and issuing 0.0801 of its shares for each Osino share.

The consideration marks a 44.3% premium to Osino stock’s 30-day volume weighted average price (VWAP) on 15 December 2023.

This deal is pending regulatory approvals, with completion due in the first half of next year.

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Post closing, DPM will issue 13.76 million of its shares to Osino shareholders, who will hold a stake of around 7% in the merged entity.

Through the deal, DPM will acquire a 100% stake in Osino’s Twin Hills gold project in Namibia, where DPM has also been operating since 2010.

According to Osino’s feasibility study this June, the Twin Hills project can annually produce up to 175,000oz of gold over the first five years and 162,000oz per year over its 13-year mine life.

The project, expected to begin production in the second half of 2026, holds a 20-year mining licence.

DPM said that after gaining ownership on the project, it is poised to become a ‘leading’ intermediate gold producer, adding to its production profile of around 258,000 gold ounces per annum from its Chelopech and Ada Tepe mines in Bulgaria.

Its pipeline of projects will now include Osino’s Twin Hills project, along with the Čoka Rakita deposit in Serbia that has an inferred mineral resource of 1.78 million ounces of gold.

DPM president and CEO David Rae said: “Twin Hills represents a unique opportunity to add a high-quality development asset in an excellent mining jurisdiction to our portfolio. The project provides a foundation for our future production profile with production targeted for 2026, as well as significant exploration upside.

“This transaction also allows us to leverage our strong local relationships in Namibia, which we have built over many years, and continue our focus on growing our portfolio of gold assets. With Twin Hills and Čoka Rakita, DPM will have an extremely attractive growth pipeline and the financial capacity to fund it internally through our existing cash balance and free cash flow.”

Osino president and CEO Heye Daun said: “On behalf of Osino shareholders, I am very pleased to be delivering the Twin Hills gold project to DPM. DPM is a highly credible and well-financed builder and operator of gold mines with the technical skills and financial resources to progress the project through construction and into production.

“We are very proud to have attracted a company of DPM’s calibre, thereby securing the future development of Twin Hills, which we believe has the potential to become Namibia’s third and largest gold mine.”

In June this year, DPM agreed to acquire a 75% interest in the Iglika copper-gold prospecting licence in Bulgaria from Velocity Minerals. It has agreed to support Velocity to fund drilling activities at the project.

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