🔴 LIVE: The Secrets of ProPicks AI Success Revealed + November’s List FREEWatch Now

UPDATE 4-Endeavour in Teranga merger talks as West African mining deals hot up

Published 2020-11-10, 09:23 a/m
© Reuters.
GOLD
-
EDV
-
TGZ
-

(Adds analyst comment, updates shares)

TORONTO, Nov 10 (Reuters) - Endeavour Mining EDV.TO said it is in talks with smaller West African-focused miner Teranga Gold TGZ.TO over a merger which if it proceeds would mark the latest in a series of deals involving the gold-rich region.

Teranga's shares rose 4.3% in Toronto on Tuesday, while Endeavour's were down 5.5% at 1718 GMT, signalling potential investor doubts about the benefits of a combination.

Endeavour, which is 24.12% owned by Egypt's Sawiris family, has been on the acquisition trail this year as gold prices have gained on the back of global stimulus.

Further consolidation in West Africa brings with it the possibility of economies of scale which could help miners manage increasing security costs, especially in the unstable Sahel.

"The combination of Endeavour and Teranga would further solidify Endeavour as West Africa's leading gold producer - though a low premium offer for Teranga would leave too much value on the table," Raymond James analyst Craig Stanley said.

In March Endeavour acquired Semafo to become Burkina Faso's biggest gold producer, increasing its focus there despite rising insecurity. had a market capitalisation of C$5.23 billion ($4 billion) as of Monday's close, while Teranga was valued at C$2.2 billion.

A deal with Teranga, if completed, would add another operating mine – Wahgnion – to Endeavour's four existing mines in Burkina Faso, and also give it exposure to Senegal.

Teranga last year bought Barrick Gold's ABX.TO 90% stake in Senegal's Massawa project. CEO of Barrick Gold, which operates Mali's biggest gold mine, has been among the loudest industry voices calling for consolidation. with gold prices - and company valuations - at eye-watering levels, mining executives have been trying to reassure investors that they are not going on buying sprees or paying hefty premiums. ($1 = 1.3022 Canadian dollars)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.