Titan Minerals intends to purchase gold producer Andina Resources for the primary purpose of reconsolidating the Torrecillas gold project in Peru, in which it currently has a 70 per cent right to earn-in.
The deal represents a significant opportunity for Titan to expand its gold and base metals production in the region.
Titan will acquire Andina via a takeover bid of one Titan share for every 1.18 Andina shares, an arrangement that will allow Titan to retain existing cash reserves. Titan will spend just over a quarter of its share capital on the deal, represented by almost 562 million new Titan shares.
While Titan currently has the right to a 70 per cent earn-in on the Torrecillas gold project, the deal will allow the company ownership without the earn-in. In addition, Titan will acquire the Tulin and Vista gold plants, where it can use pre-existing mill facilities to save $US4 million ($5.2 million) and avoid three to four years of approvals for new mills.
Nicholas Rowley, non-executive director of Titan, said that by consolidating Torecillas, Tulin and Vista into a single entity the company would be “uniquely positioned” to mill its own ore.
“Consolidation of the ownership of the Torrecillas gold project will ensure that any future discoveries can be owned by Titan exclusively, with minimal additional capital expenditure by utilising existing heavy, equipment, personnel and senior management,” he said.