Avnel Gold – Endeavour Mining Takeover (June 28, 2017)

by FI Fighter on June 28, 2017

in Precious Metals Updates

Endeavour Mining (EDV.TO/EDVMF) strikes again! I just caught hold of this press release and it looks like one of my top “takeover candidates”, Avnel Gold (AVK.TO/AVNZF), just got swallowed up!

Press Release.

Interestingly enough, just over a year ago, I owned shares of True Gold Mining (TGM.V), which was acquired by Endeavour Mining for a pretty hefty premium (one of my biggest wins ever).

Here’s where shares of AVK.TO closed at the end of today’s trading session.

At closing, the market cap of Avnel Gold was ~C$107 million. At a 48% premium, Endeavour Mining will be acquiring all Avnel shares at C$159 million ($122 million USD), as stated in the press release shown above.

Obviously, the gold market isn’t all that great right now, and the price Endeavour is paying isn’t really all that steep to gain hold of one of the better undeveloped gold projects out there.

Here are some more details about Avnel’s Kalana gold deposit:

Kalana is a fully permitted feasibility-stage project based on a 1.2Mtpa carbon- in-leach (“CIL”) plant and a single open-pit constrained reserve of approximately 2.0Moz grading 2.8 g/t. According to the feasibility study, it has an 18-year mine life and an expected production of 101,000 ounces per year at an average All-in Sustaining Cost (“AISC”) of $784/oz (with 148,000 ounces on average during the first 5 years at an average AISC of $589/oz). The initial capital cost is forecast at $196.3 million and Kalana demonstrates robust economics with an after-tax NPV5% of $257 million, an after-tax IRR of 38% and a payback of 1.2 years based on a gold price of $1,200/oz.

Nevertheless, right now, I’ll take what I can get! And a 48% premium isn’t too shabby at all.

Sometimes, you just gotta be grateful for the wins as they come in.

I need to spend some more time reading the press release, but at first glance, it looks pretty good, even if Avnel also has to give up its exploration targets (e.g. Kalanako) outside of Kalana… Endeavour Mining is one of the best mid-tier gold producers out there, and ironically enough, this will now be the second instance where I’ll be able to acquire shares of EDV.TO/EDVMF indirectly.

 

Funny how things work out sometimes…

 

I currently own 130,000 shares of Avnel Gold.

 

I first discussed Avnel Gold on this blog here.

 

It’s way too early in the process right now and I haven’t yet decided if I will hold onto the newly issued EDV.TO/EDVMF shares or if I will book profits and close out my AVK.TO/AVNZF position prior to the merger/acquisition settling.

 

Either way, this is a HUGE win… and perhaps the main reason why folks like myself dabble with the junior cap explorers/developers; the dream scenario (ultimate exit strategy) is usually to get taken out by a larger company at a premium to market.

 

C’mon Orezone Gold (ORE.V/ORZCF), you’re next!

 

Fight On!

Related Posts :

{ 6 comments… read them below or add one }

1 JCNo Gravatar June 29, 2017 at 5:54 am

Is it too late to enter a position in Avnel, say after this takeover news has already been released? I haven’t seen the reflected gains in the stock as of today? Or would that premium only be reflected in the amount of newly issued Endeavour shares?

Reply

2 FI FighterNo Gravatar June 29, 2017 at 5:58 am

JC,

The news was just announced late last night… My guess is that the re-rating will occur at today’s open. Until the acquisition is completed, I would expect shares of Avnel to track Endeavour Mining moving forward relative to the terms of the agreed upon deal.

Typically, once the news of a takeover is announced, it’ll be difficult for anyone to buy at a discount… but who knows? Maybe you can get lucky and a stink bid will still work at market open?

All the best!

Reply

3 VinNo Gravatar June 29, 2017 at 6:18 am

Yes! Another takeover that I can add to my list! Congrats to you mate..

I have only recently found out about your blog (loving it!), but it’s eery to see the overlap in our portfolios haha Thanks to you I have found out about Sandspring and Sarama Resources Ltd. Cheers for that! Below @all you can find my portfolio. By sharing our knowledge (please do your own due dilligence!!) we can make more $$$ all together.

Adamera Minerals Corp
Alexco Resource Corp
Alto Ventures Ltd
Arizona Mining Inc
Auryn Resources Inc
Avino Silver & Gold Mines
Avnel Gold Mining Ltd
Bear Creek Mining Corp. (CA)
Coeur Mining Inc
Defiance Silver Corp
Eastmain Resources Inc.
Endeavour Silver Corp
Falco Resources Ltd
First Majestic Silver Corp
Fortuna Silver Mines Inc
Golden Arrow Resources Corp.
GoldQuest Mining Corp
Great Panther Silver Ltd
Hecla Mining Co
Kirkland Lake Gold Ltd
Metanor Resources Inc
Mineral Mountain Resources Ltd.
Mirasol Resources Ltd.
Orca Gold Inc
Palamina Corp
Sandspring Resources Ltd.
Sandstorm Gold Ltd
Sarama Resources Ltd
Scandium International Mining Corp
Silver Standard Resources Inc
Silvercorp Metals Inc.
Silvercrest Metals Inc
Southern Silver Exploration Corp
Teranga Gold Corp
Verde Agritech PLC

Reply

4 FI FighterNo Gravatar July 3, 2017 at 10:56 pm

Vin,

Awesome list! Thanks for sharing, I appreciate that and I’m sure readers do as well.

Glad to see another takeover happen! 🙂

All the best!

Reply

5 TrevorNo Gravatar June 29, 2017 at 7:12 am

Jay,

I woke up this morning to see a 41% increase to Avnel and was like woah, takeover happened! Jay hit a home run on this one! And luckily for me, I entered this one by recommendation of you. 🙂 I really appreciate it. Now if we can get all these other miners to get moving!

Reply

6 FI FighterNo Gravatar July 3, 2017 at 10:57 pm

Trevor,

Congrats on the big win! Haha, yeah sometimes it’s better to be lucky than good…. I really didn’t expect this announcement but will gladly take it!

Yup, hopefully the summer doldrums end soon and we are off to the races again and some big gains with these mining stocks.

Cheers!

Reply

Leave a Comment

 

Previous post:

Next post:

Copyright © 2012 FI Fighter