Torex Gold to Acquire Prime Mining

Core Viewpoint - Torex Gold Resources Inc. has entered into a definitive agreement to acquire Prime Mining Corp., which includes the Los Reyes gold-silver project, enhancing Torex's asset base and growth potential in Mexico [1][2]. Transaction Overview - The transaction will result in Torex owning a 100% interest in the Los Reyes project, which has a combined resource of approximately 1.5 million ounces of gold and 54 million ounces of silver in the Indicated category [2]. - Prime Mining shareholders will receive 0.060 of a common share of Torex for each Prime Mining share held, representing a 32.4% premium to the 30-day volume-weighted average price of Prime Mining shares [2][3]. - The equity value for Prime Mining is approximately $449 million (US$327 million) based on the exchange ratio [2]. Strategic Rationale and Benefits - The acquisition diversifies Torex's asset base by adding a high-quality advanced exploration/development-stage asset in Mexico, significantly enhancing its growth potential [4]. - The Los Reyes project increases Torex's Measured and Indicated Resources by 32% to 6.2 million ounces of gold and Inferred Resources by 44% to 1.8 million ounces of gold [4]. - The project adds substantial silver exposure, with 54 million ounces in the Indicated category and 21.6 million ounces in the Inferred category [4]. - There is significant exploration upside at Los Reyes, with multiple high-grade discoveries and open mineralization zones [4]. Financial and Market Impact - Upon completion, Torex will issue approximately 10.5 million shares to Prime Mining shareholders, who will own about 10.7% of Torex [3]. - The transaction enhances Torex's capital markets profile, with a market capitalization of approximately US$2.7 billion, increasing market presence and trading liquidity for Prime Mining shareholders [8]. - The acquisition is expected to leverage Torex's strong balance sheet and free cash flow to fund the development of Los Reyes while remaining cash flow positive [8]. Approval and Governance - The transaction requires approval from at least 66.67% of Prime Mining shareholders and is subject to customary regulatory approvals [11][13]. - Key shareholders of Prime Mining, owning 23% of shares, have entered into voting support agreements to favor the transaction [12][19]. - The Board of Directors of both companies have unanimously approved the transaction, with fairness opinions received from financial advisors [18][20].