Lake Shore Gold will soon become part of Tahoe Resources. The mining companies announced on Monday that Tahoe intends to buy a 75% stake in Lake Shore by exchanging shares in that company for Tahoe shares.
This announcement comes after trading on Lake Shore Gold’s shares were halted on Friday. It appeared at the time that it was to halt market speculation after positive news from an ongoing exploration project, but it now seems it was in anticipation of announcing the merger.
Under the agreement announced on Monday, each common share of Lake Shore Gold will be exchanged for a 0.1467 share in Tahoe which, when the markets closed on Friday, was worth $1.71. This would mean Lake Shore Gold shareholders would make a 15 cent profit on every share they own.
Before the merger can go ahead, however, it will need to be approved by two-thirds of Lake Shore’s shareholders.
Tahoe is a precious metals mining company that operates two mines in Peru and one in Guatemala. By adding the Timmins West and Bell Creek mines on top of its own existing operations in South America, Tahoe’s CEO, Kevin McArthur, said it will create a company that is firmly established as a premier Americas-based precious metals producer.
“The combination with Lake Shore Gold enhances Tahoe’s position as the new leader in precious metals by adding another low-cost operation in Timmins, one of the most prolific gold camps in the world,” said McArthur in a statement.
“We are impressed by the long-term presence and see tremendous regional opportunities going forward. We look forward to continuing the strong relationships that Lake Shore Gold has fostered in Timmins with local stakeholders.”
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