- INV Metals (INV) has entered into a definitive agreement with Dundee Precious Metals (DPM)
- DPM will acquire all of the issued and outstanding shares of INV Metals that DPM does not currently own under a court-approved plan of arrangement
- Common shares of INV Metals will be exchanged for 0.0910 of a DPM common share, a 63 per cent premium on the closing price of INV Metals shares as of May 28, 2021
- The shareholder meeting is expected to be held in July 2021 and the transaction is expected to close shortly thereafter
- INV™ Metals is an international mineral resource company
- Dundee Precious Metals (DPM) is an international gold mining company
- Dundee Precious Metals Inc. opened trading at $8.81 per share
INV Metals (INV) has entered into a definitive agreement with Dundee Precious Metals (DPM).
DPM will acquire all of the issued and outstanding shares of INV Metals that DPM does not currently own under a court-approved plan of arrangement. DPM currently owns approximately 23.5% of outstanding INV Metals common shares.
Highlights of the transaction
- Each issued and outstanding common share of INV Metals that DPM does not currently own will be exchanged for 0.0910 of a DPM common share.
- The transaction has strong shareholder support, with management and directors of INV Metals and IAMGOLD Corporation (“IAMGOLD”) entering into voting support agreements representing, approximately 47% of the outstanding common shares of INV Metals.
- The exchange ratio implies consideration of C$0.80 per INV Metals common share. This represents a 63% premium to the closing price of INV Metals common shares on the TSX on May 28, 2021.
- The implied equity value of the transaction is approximately C$132 million, C$104 million for the portion not owned by DPM.
- Upon completion of the transaction, existing DPM and INV Metals shareholders will own approximately 94.5% and 5.5% of the pro forma company, respectively.
Benefits to INV Metals shareholders
- 63 per cent premium on the closing price of INV Metals shares as of May 28, 2021
- Ongoing exposure to the Loma Larga gold-copper-silver project and Dundee’s greenfield exploration properties located in Ecuador
- Exposure to DPM’s diversified portfolio of high-quality, low-cost operating mines and development projects
- Enhanced cash flow generation and trading liquidity
- Participation in future DPM quarterly dividends to shareholders
- Reduced dilution, financing, development, and execution risk
“We are very pleased to announce this transaction today following many years of hard work and dedication from the INV Metals team. We believe DPM is uniquely positioned to move Loma Larga forward, and as such, this transaction is not only an excellent outcome for our shareholders, but also one with the potential to offer tremendous benefits for both the Project’s national and local stakeholders in the coming years,” said Candace MacGibbon, Chief Executive Officer of INV Metals.
“This transaction leverages our proven strengths as an environmentally and socially responsible mining company, and we look forward to engaging with all national and local stakeholders,” said David Rae, Dundee Precious Metals’ President and Chief Executive Officer. “Loma Larga adds a high-quality, advanced-stage gold project to our portfolio that has the potential to generate meaningful production growth and significant value for our stakeholders.”
“Our approach to advancing Loma Larga will benefit from our firm commitment to the highest standards for engagement with local communities and environmental stewardship, in addition to our development and operating experience to further unlock the significant potential of the project.”
Transaction summary
The transaction requires the approval of at least 66 2/3% of the votes cast by the shareholders of INV Metals and a simple majority of the votes cast by holders of INV Metals.
IAMGOLD, along with the directors and officers of INV Metals, holding 36% and 11%, respectively, of the issued and outstanding common shares of INV Metals, have agreed to vote in favour of the transaction. Together with the shares already owned or held by DPM, this represents approximately 70% of INV Metals issued and outstanding shares that will be voted in support of the transaction.
In addition to shareholder and court approvals, the transaction is subject to applicable regulatory approvals including, TSX approval and the satisfaction of certain other closing conditions customary in transactions of this nature.
The agreement contains a C$4.53 million termination fee payable to DPM under certain circumstances.
The shareholder meeting is expected to be held in July 2021 and the transaction is expected to close shortly thereafter.
Board of Directors and Special Committee recommendations
The agreement has been unanimously approved by the Boards of Directors of DPM and INV Metals, excluding David Rae, President & CEO of DPM. INV Metals’ Board of Directors and the board of directors’ special committee unanimously recommend that INV Metals shareholders vote in favour of the transaction.
BMO Capital Markets and Trinity Advisors Corporation have provided a fairness opinion, each stating that the consideration to be paid under the transaction is fair, from a financial point of view to INV Metals shareholders, other than DPM.
The INV Metals Special Committee also engaged Segal Valuation & Transaction Advisory LLP (Segal) as an independent evaluator to prepare a formal valuation of the INV Metals common shares under MI 61-101. The INV Metals Special Committee received the formal valuation from Segal, which concluded that the consideration to be paid under the transaction is within the valuation range determined by Segal.
INV™ Metals is an international mineral resource company focused on the acquisition, exploration and development of precious and base metal projects in Ecuador.
Dundee Precious Metals (DPM) is an international gold mining company. It is engaged in the acquisition, exploration, development, mining, and processing of precious metals.
Dundee Precious Metals Inc. opened trading at $8.81 per share.