TSE-CG – Centerra Gold looks to lower risk with Thompson Creek acquisition

Canadian mining company Centerra Gold Inc. (TSE-CG, Mkt cap 1.66B, P/E 72.73, Div/yield 0.04/2.15, EPS 0.10, Shares 242.01M) said on Tuesday that it has agreed to acquire U.S.–based Thompson Creek Metals for approximately US$1.1bn in shares and cash, including the assumption of almost US$900m of debt.

TSE-CG - Centerra Gold lower risk Thompson Creek acquisition

TSE-CG – Centerra Gold looks to lower risk with Thompson Creek acquisition

Centerra owns the Kumtor gold mine in Kyrgyzstan and the Boroo gold mine in Mongolia. According to the Globe and Mail, the company has been seeking a North American counterweight to its existing operations. Thompson Creek’s main asset is the Mount Milligan copper and gold mine in British Columbia.

SE-CG – Centerra Gold has been seeking a North American counterweight to its existing operations.

“Half of the value of all our assets will now be domiciled in Canada. I really think we have absolutely transformed the company in a very favorable way,” Centerra CEO Scott Perry told Reuters in an interview.

Additionally, Centerra has entered into an agreement with mining financier Royal Gold to restructure Royal’s streaming finance deal with Thompson Creek. Under the renegotiated deal, Royal Gold’s 52.25% gold streaming interest at Mount Milligan will be amended to a 35% gold stream and 18.75% copper stream.

Perry said in a statement that the Thompson Creek acquisition diversifies the company’s operating platform and adds low-risk production and cash flow from a high quality, long-lived asset in Mount Milligan.

He continued: “The acquisition will establish an operating base in Canada — one of the lowest risk mining jurisdictions in the world — which will complement our Canadian-based Greenstone project and provide for further flexibility to expand into the Americas.”

The Greenstone project is located in the Geraldton-Beardmore Greenstone belt in Ontario. Centerra is a 50/50 joint venture partner.

“This business combination is complementary in nature, combining Centerra’s robust balance sheet with Thompson Creek’s high quality asset base,” Perry added.

Centerra Gold Inc. (TSE-CG) is a Canada-based gold mining company focused on operating, developing, exploring and acquiring gold properties in Asia, North America and other markets across the world. The Company’s exploration segment includes the operations of Lagares Project in which the activities are related to its subsidiary, Centerra Gold (KB) Inc. Its Kyrgyz segment includes Kumtor Gold Co. (KGC) (Kyrgyz Republic), which operates Kumtor Mine. Its Mongolian segment includes Centerra Gold Mongolia LLC (CGM) (Mongolia), which operates ATO Project and Gatsuurt Project, and Boroo Gold LLC (BGC) (Mongolia), which operates Boroo Mine. Its Turkish segment includes Centerra Luxembourg Holdings S.ar.L (Luxembourg), Centerra Exploration B.V. (CEBV) (The Netherlands), and Oksut Madencilik Sanayi Ve Tkaret A.S. (Turkey), which operates Oksut Project. Its Canadian segment includes Hearts Peak Project and Greenstone Gold Mines (Canada). Its subsidiaries also include Greenstone Gold Mines GP Inc. More from Reuters »

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