Calibre Mining Corp (TSX: CXB, OTC: CXBMF) is buying Fiore Gold Ltd (TSX-V: F, OTCQB: FIOGF, FSE: 2FO) for C$110.1 million ($89.1m) in cash and stock. This is a fantastic development in the journey of this prosperous Canadian miner.
Indeed, Calibre has a rock star team at the helm and is steadfastly focused on delivering another multi-billion-dollar success story.
As the outlook begins to look more prosperous for gold, the timing couldn’t be better for the undervalued Canadian miner.
Calibre Fiore acquisition details
Calibre Mining will pay C$10.1 million (US$8.1 million) in cash and C$100.1 million (US$81 million) in stock. This means existing Fiore Gold shareholders will receive 0.994 of a Calibre common share and C$0.10 in cash for each Fiore common share held. And it represents a premium of 44% based on the closing prices of Calibre and Fiore common shares on October 22, 2021.
This deal is anticipated to close in January next year following regulatory approvals.
The deal was brokered and advised by Haywood Securities Inc for Fiore Gold Ltd, while Trinity Advisors Corp and Canaccord Genuity Corp advised Calibre Mining Corp.
Positioning for continued growth
The team running Calibre Mining has an incredible track record and has collectively created over $5 billion in wealth for shareholders from previous undertakings.
This gives shareholders confidence in their ability to know a good deal when they see it.
And Fiore Gold appears to be precisely that.
Fiore, a US domestic gold producer, delivered across-the-board growth in 2020. It has diversified production in the Americas, established operations, mine life expansion potential and robust organic growth platforms. This is an outstanding addition to the Calibre Mining portfolio.
Once again, this move demonstrates the shrewd vision of the Calibre Mining team and its ability to execute on its vision without delay.
Core to its progress is acquiring and optimizing gold production with a focus on continued growth and share price appreciation. The acquisition of Fiore Gold perfectly illustrates this.
Is gold getting set to soar?
Gold enjoyed a spectacular bull run in 2020, but it’s been languishing this year. Many cite the popularity of bitcoin for this phase, but gold bugs wholeheartedly disagree. Those who favor the yellow metal cite its long and illustrious history as a reason to continue to believe in its worth.
Gold is a stable investment with a proven track record, particularly in times of geopolitical and financial uncertainty. It has been an established store of value for centuries, and many countries still favor it as a preferred show of wealth.
Why shareholders should care
The Fiore Gold acquisition gives Calibre Mining a platform of production and growth in Nevada, which is a tier-one mining jurisdiction globally.
This is an established heap leach mining operation that adds 50,000ozs of gold production per year and cash flows from the Pan Mine (based on consensus estimates).
The acquisition gives Calibre the potential to expand mineral resources and make new discoveries at identified targets along strike at Pan and Gold Rock.
It raises meaningful production growth potential from the future development of Gold Rock in Nevada.
It gives Calibre Mining a Nevada base of operations with a substantially underexplored 222 km2 land package.
Given their proximity, there may also be prospective surface synergy value from the Pan Mine and Gold Rock project.
The acquisition also provides long-term optionality from the Golden Eagle project in the USA.
Furthermore, the combined cash position of Calibre Mining and Fiore Gold is $96 million as of September 30, 2021. It is debt-free, with a bulletproof balance sheet and is unhedged with strong future free cash flows.
The founders of Calibre Mining are aligned with their shareholders by displaying significant skin in the game and diligently unlocking future value.
Calibre Mining is expanding resources, making new discoveries, and expanding production all with existing infrastructure. This acquisition of Fiore Gold is another significant step in this profitable journey.