Australia’s St Barbara snaps up Canada’s Atlantic Gold for $536 mln – by Melanie Burton (Reuters Canada – May 14, 2019)

https://ca.reuters.com/

MELBOURNE (Reuters) – Australian gold miner St Barbara said on Wednesday it will buy smaller Canadian peer Atlantic Gold Corp for C$722 million ($536 million), marking a second overseas acquisition for cashed-up Australian producers.

St Barbara’s C$2.90 a share cash offer represents a 39% premium to Atlanta Gold’s closing price on Tuesday in a deal that analysts said opened up growth options, but could lead to a call on capital and crimp dividends.

“Buying an unknown asset in a new country which itself potentially requires a fresh injection of capital… could present an additional barrier for some investors,” said RBC Capital in a report.

The bid, which has the backing of Atlantic’s board, comes after Australian gold miner Newcrest Mining Ltd bought a copper and gold mine in Canada for $806.5 million in March and said it had the firepower for more acquisitions.

Other mid-tier Australian miners, Evolution Mining and Northern Star Resources have also been touted by analysts as acquirers of miners overseas.  Australian dollar denominated gold is just shy of January’s record of A$1,894 an ounce and up about 9% from a year ago, while U.S. dollar gold is virtually flat.

For the rest of this article: https://ca.reuters.com/article/businessNews/idCAKCN1SK2RU-OCABS

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