A proposed merger between African and Middle Eastern gold mining specialists Endeavour Mining Corporation (TSX:EDV) (OTCQX:EDVMF) and Centamin plc (TSX: CAD) (LSE: CEY) has been canned.
The deal was terminated when Endeavour was informed by Centamin plc that it did not intend to seek an extension to a January 14, 2020, “put up or shut up” PUSU deadline.
Sébastien de Montessus, President and CEO of Endeavour Mining said that given the lack of information received, Endeavour has confirmed the company does not intend to make a firm offer for Centamin and therefore the merger discussions have been terminated.
“We remain convinced about the strategic rationale of combining Endeavour and Centamin to create a diversified gold producer with a high-quality portfolio of assets,” Mr de Montessus.
“The quality of information received during the accelerated due diligence process has been insufficient to allow us to be confident that proceeding with a firm offer would have been in the best interests of Endeavour shareholders.
“We continue to be disciplined in relation to business development opportunities and remain sensitive to dilution of our shareholders given the significant improvement in our business over the past four years.
“Following a period of significant investment, our business is now well positioned to generate significant cash flow as demonstrated with our net debt reduction of US$52 million.”
Endeavour made an initial approach to Centamin in 2019 as it believed that a recommended all-share merger would strongly benefit both sets of shareholders due to the compelling long-term value creation opportunity.
Following the Endeavour announcement, Centamin told its shareholders that following a comprehensive and reciprocal due diligence process, the Board has unanimously concluded that the possible offer from Endeavour Mining Corporation materially undervalued Centamin and its prospects.
Dual-listed on the London and Toronto Stock Exchanges, Centamin’s principal asset, the Sukari Gold Mine, began production in 2009 and is the first large scale modern gold mine in Egypt. Base case production is c. 500,000 ounces per annum, with the potential to exceed this level as optimisation of the mining and processing operations continues