Big River Gold’s board has unanimously recommended an all-cash takeover offer by Toronto Stock Exchange-listed Aura Minerals to privatise Big River.

The offer of 36c/share represents a 33.3% premium to yesterday’s closing price of 27c/share and values Big River at approximately AU$91.7 million.

Through a scheme of arrangement between Big River (ASX:BRV) and its shareholders, a subsidiary of the Canadian-based miner, Aura BidCo, will acquire 100% of Big River.

Perth-based Big River has been developing its flagship Borborema gold project in Brazil.

Big River Chairman, Andrew Richards, said of the proposed scheme:

“(It) represents an attractive, all-cash offer which provides certainty of value for Big River shareholders. The Borborema project is at a critical stage of development, with significant future capital requirements and embedded development risks and uncertainties.”

Payment will be funded entirely from Aura’s cash reserves, which at the end of last year were approximately US$162 million.

“Having considered a range of alternative courses of action, Big River’s Independent Board Committee has unanimously concluded that the scheme represents a compelling offer for our shareholders who would otherwise be facing significant future equity dilution as a result of capital cost increases, as well as inherent risks and uncertainties to fully develop a project such as Borborema,” Richards said.

“The scheme places the development of the Borborema project (including its future upside and risks) in the hands of an accomplished and well capitalised gold and copper producer.”

News of the Big River takeover comes as M&A activity in the Brazilian gold sector has been heating up after Covid disruptions.

Major shareholders in favour

Substantial shareholder Copulos Group, which owns 18.8% of ordinary shares on issue, intends to vote in favour of the scheme.

Another of Big River’s largest shareholders, Dundee, which as a voting power of 19.3%, also supports the transaction. The Canadian headquartered mining-focused investor and wealth manager will, except in some limited circumstances, receive unlisted shares in the holding company of Aura BidCo instead of the cash offered to other Big River shareholders.

“With a significant premium of over 42% to the 60, 90 and 180 trading day volume-weighted average prices, and with the support of substantial shareholder Copulos as provided for in the voting intention statement, Aura’s offer provides Big River shareholders (other than Dundee) with certainty of value and the opportunity to realise their investment in full for cash,” Richards said.

Next steps

Aura’s offer is subject to usual conditions including Big River shareholder and regulatory approvals, and of course that there is no superior offer made.

It is expected that Big River shareholders will vote on the bid at meetings currently set for early July 2022. A booklet will be sent to shareholders in early June and this will contain more information about the offer and shareholder meetings.

About Aura

Aura is a mid-tier gold and copper producer with producing mines in Brazil, Honduras, and Mexico, as well as two gold development assets in Brazil and one in Colombia.

It has a market capitalisation of approximately CAD $880 million.




This article was developed in collaboration with Big River Gold, a Stockhead advertiser at the time of publishing. 


This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.