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Shareholders OK OceanaGold, Romarco gold mine deal

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Staff Report
colanews@scbiznews.com
Published Sept. 29, 2015

Shareholders have cleared the way for Australia-based OceanaGold Corp. to acquire Romarco Minerals, owner of Haile Gold Mine in Lancaster County.

Under the agreement, Romarco shareholders will receive 0.241 of an OceanaGold common share for each Romarco common share held. Closing is pending final approval of the deal by the Supreme Court of British Columbia, which is expected on Thursday.

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"Through our transaction with Romarco and with the addition of the Haile Gold Mine, OceanaGold will enhance its already solid foundation of high margin, high quality operating assets,” said Mick Wilkes, managing director and CEO of OceanaGold. “Supported by OceanaGold's strong balance sheet, as well as its development and operating expertise, bringing the Haile Gold Mine through construction and into production will further diversify our global production profile and cement OceanaGold as the low cost gold producer globally."

The merger will create a sector leading low-cost intermediate gold producer, said Diane Garrett, president and CEO of Toronto-based Romarco.

Romarco previously said that it expects Haile to produce about 540,000 ounces of gold a year by 2017 at a total cost of about $600 an ounce compared with the spot market price of $1,134.10 per ounce that was reported at noon today.

OceanaGold agreed to buy Romarco for about $856 million in Canadian currency or approximately $657.2 million in U.S. dollars.

In January, Romarco cleared the last regulatory hurdle in obtaining a state permit to launch operations at the mine near Kershaw by reaching an agreement with the S.C. Chapter of the Sierra Club and the S.C. Department of Health and Environmental Control requiring it to raise the bond needed to cover cleanup costs when mining ends.

Construction at Haile commenced in May and first gold pour is anticipated during the fourth quarter of 2016.   

Romarco, which bought Haile from Kinross Gold Corp. in 2007, said it expected project costs to total about $1.1 billion during the development and active mining operations at the facility.

The amount includes $822 million for land, equipment and other items and about $284 million for labor.

Development of the 4,552-acre project area will take 15 years and employment will range from 150 to 420 employees.

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