IAMGOLD to buy Vanstar

IAMGOLD will acquire Vanstar Mining Resources in a friendly C$45 million all-stock transaction, consolidating its ownership of the Nelligan gold deposit in Quebec, Canada.

Vanstar shareholders will receive 0.2008 of an IAMGOLD share at an implied valuation of 69c per share, a 74% premium to the 20-day volume-weighted average price of Vanstar shares.

The transaction is subject to approval by the Superior Court of Québec, and will require approval by at least two-thirds of the votes cast by Vanstar shareholders at a special meeting to be held in January 2024.

"This transaction consolidates our interests in the highly prospective Nelligan deposit while building our exploration portfolio within Northern Quebec," said IAMGOLD chief commented Renaud Adams.

"This transaction provides a meaningful premium to our shareholders and the opportunity to continue to benefit as part of an established gold producer with a meaningful growth pipeline, including participation in the ramp-up of Côté Gold," said Vanstar chief executive JC St-Amour.

All of the directors and officers of Vanstar holding an aggregate of 8.3% of the issued and outstanding Vanstar shares have entered into voting and support agreements to vote in favour of the transaction.

Vanstar owns a 25% interest in the Nelligan gold project and a 1% net smelter returns royalty on the project, a joint venture with IAMGOLD.

Nelligan hosts a January 2023 indicated resource estimate of 72.2Mt grading 0.85gpt of gold for 1.97Moz, and 114.1Mt grading 0.88gpt of inferred resources for 3.24Moz.

Under the joint venture agreement, IAMGOLD can acquire an additional 5% interest in Nelligan by delivering a feasibility study. Vanstar's remaining 20% interest would be retained as an undivided non-contributory carried interest until the commencement of commercial production, after which Vanstar would be required to pay its pro rata share of development and construction costs to the commencement of commercial production.

Vanstar is also earning 75% into the Bousquet-Odyno project located along the Cadillac Break and owns the Felix property in the Chicobi Group.

IAMGOLD continues to develop the Côté gold project in Ontario