Endeavour Mining to buy Avion Gold

NOVA SCOTIA, CANADA (Scrap Monster): Endeavour Mining Corp to buy fellow Canadian gold miner Avion Gold Corp, for C$389 million in an all-stock deal in order to expand in West Africa.

The acquisition will immediately increase its forecast gold production by approximately 50 per cent to 282,000 - 304,000 ounces for 2012.

The combined company would have a pro-forma market capitalisation of nearly $1 billion.

Avion acquisition will create one of the largest West African mining companies with three producing mines and a fourth mine currently under development.

In Ghana and Burkina Faso, Endeavour owns two gold mines producing approximately 195,000 ounces annually. The miner also owns another gold mine in Agbaou in Côte d'Ivoire, which has entered construction phase and will add 100,000 ounces per year when fully operational in Q1 2014.

Toronto-based Avion holds 80 per cent of the Tabakoto and Segala gold projects in western Mali and the advanced 1,670 km Houndé property in Burkina Faso.

Endeavour, which is valued at about C$573.9 million, said it expects the deal to close in October.

The company also posted a higher second-quarter profit on higher gold prices and output.

Endeavour's shares, which have risen 38 percent in last ten months, closed at C$2.40 on the Toronto Stock Exchange.

Endeavour Mining Corporation (TSX: EDV) is a mining company based in Nova Scotia, in Canada, that operates gold and diamond mines in Africa.