IAMGOLD, a Canadian gold producer, has announced its plan to acquire Vanstar Mining Resources in an all-stock deal worth approximately $31.1 million. The acquisition aims to consolidate IAMGOLD's interests in the promising Nelligan deposit and its exploration portfolio in northern Quebec.
Expanding Gold Exploration
IAMGOLD, known for its operating mines in North America and West Africa, will offer Vanstar shareholders 0.2008 of a share for each Vanstar share held. Vanstar is a gold exploration company with properties in different stages of development in northern Quebec.
The Nelligan Joint Venture Project
Vanstar's primary asset is its 25% interest in the Nelligan joint venture project, which it holds under an earn-in option with IAMGOLD. IAMGOLD currently owns a 75% stake in the venture. Additionally, IAMGOLD has the option to acquire an additional 5% interest by completing and delivering a feasibility study on the Nelligan project.
Terms of the Joint Venture Agreement
The existing joint venture agreement stipulates that IAMGOLD can exercise the option to obtain the additional 5% interest. Vanstar's remaining 20% interest will be retained as an undivided non-contributory carried interest until the start of commercial production. After the commencement of commercial production, this 20% stake will become participating, and Vanstar will be responsible for paying its proportionate share of the total development and construction costs from 80% of its share of any distributions from the joint venture.
IAMGOLD's acquisition of Vanstar Mining Resources represents a strategic move towards enhancing and consolidating its presence in the gold exploration industry, particularly in northern Quebec.
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