Vancouver's West Timmins Mining Inc. (TSX:WTM) has agreed to be acquired by Toronto-based Lake Shore Gold Corp. (TSX:LSG) in an all-share deal worth approximately $319 million.
The merger will combine the company's stake in the Timmins gold mining district in northern Ontario and Quebec and will create a large new gold mine complex in an area that has produced approximately 70 million ounces of gold in the past 100 years.
Under terms of the agreement, West Timmins shareholders will receive 0.73 of a Lake Shore Gold share for each West Timmins share. Following the close of the deal, Lake Shore shareholders will own 67% of the new company; West Timmins shareholders will own the remaining 33%. Three of the 13 board seats will go to West Timmins.
The combined company will have exploration rights over 130 square kilometres of land and a strong balance sheet with no debt and approximately $115 million in cash.
The deal, which is subject to shareholder and regulatory approval, is expected to close in November.
The company plans to start what it calls an aggressive and advanced underground exploration program at its Thunder Creek project.
West Timmins share price range during the past week: between $2.20 and $2.70; 52-week high: $2.74; 52-week low: $0.13