Prime Mining Corp. (PRYM.TO,PRMNF), a Canadian company, on Monday announced that it has entered into a definitive agreement under which Torex Gold Resources Inc. (TXG.TO, TORXF) will acquire all issued and outstanding common shares of Prime Mining's Los Reyes gold-silver project in Mexico through a plan of arrangement.
If approvals are obtained as expected, the transaction is anticipated to close in the second half of 2025, with Prime Mining shares to be delisted from the TSX shortly thereafter.
Under the terms of the agreement, Prime Mining shareholders will receive 0.060 of a Torex share for each Prime share held.
The exchange ratio values Prime Mining shares at C$2.57 each, based on Torex's closing price on July 25, representing an equity value of approximately C$449 million or $327 million.
The offer reflects an 18.5% premium to Prime's July 25 closing price and a 32.4% premium to its 30-day volume-weighted average price.
Upon completion of the transaction, Torex Gold will issue approximately 10.5 million shares to Prime Mining shareholders. As a result, existing Prime Mining shareholders will own approximately 10.7% of the combined company.
The company said the combined company will have greater financial strength, increased market visibility, and improved trading liquidity.
The deal remains subject to regulatory approvals, including the TSX and clearance under Mexican antitrust laws, along with standard closing conditions.
A termination fee of $12.5 million may be payable to Torex by Prime in certain circumstances if the transaction does not close.
Los Reyes is a highly prospective, advanced-stage asset with a combined open-pit and underground mineral resource of approximately 1.5 million ounces of gold and 54.0 million ounces of silver in the Indicated category, and an additional 538,000 ounces of gold and 21.6 million ounces of silver in the Inferred category.
On Friday, Prime Mining closed trading 0.46% higher at C$2.1700 on the Toronto Stock Exchange.
On Friday, Torex Gold closed trading 0.37% higher at C$42.85 on the Toronto Stock Exchange.
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