Lake Shore Gold being acquired by Tahoe Resources

Vancouver-based Tahoe Resources is acquiring Lake Shore Gold.

Tahoe announced it would acquire all shares of Lake Shore Gold in an agreement to combine the companies.

Under the agreement, Lake Shore shareholders will receive 0.1467 of a Tahoe common share per Lake Shore share. Once the transaction is completed, Tahoe and Lake Shore shareholders will own approximately 74 per cent and 26 per cent of the new company, respectively.

“The combination with Tahoe represents a unique opportunity for our shareholders to gain exposure to a high-quality portfolio of long-life producing mines with substantial mineral reserves,” Lake Shore’s CEO, Tony Makuch, said in a release.

On Feb. 4, Lake Shore announced it had found new gold mineralization at its Whitney project, which the company acquired when it took over Temex Resources in September.

Makuch said the discovery of the new mineralization shows the long-term potential of the Timmins portfolio.

“Tahoe’s strong balance sheet and superior cash-generating capabilities will provide Lake Shore Gold with the financial resources to unlock the enormous growth potential of our asset base,” Makuch said.

Lake Shore Gold operates the Timmins West and Bell Creek gold mines, along with the Bell Creek mill in Timmins.

Tahoe Resources operates the Escobal silver mine in Guatemala and La Arena gold mine in Peru, and is developing the Shahuindo project, also in Peru.

Shareholders from both companies have to first approve the combination, which is anticipated to take place in April, and the agreement is expected to be finalized shortly after.