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Merger of gold miners Endeavour and Centamin closer

By Hugh Wilson

Executives of both companies agree to due diligence ahead of decision on possible amalgamation

The merger of gold miners Endeavour and Centamin has edged closer after the two companies agreed to carry out reciprocal due diligence.

The two companies will explore the feasibility of a merger, despite Centamin knocking back a £1.47bn ($1.89bn, €1.69bn) takeover offer from Endeavour earlier this month.

Canadian company Endeavour said it “remains convinced of the strategic rationale of combining both companies to create a diversified gold producer with a high-quality portfolio of assets”.

The due diligence process would be a “critical precursor” to any merger, Endeavour said, and would “allow both companies to further understand each other’s assets”.

Endeavour controls assets in West Africa, while Jersey-based Centamin’s include the Sukari mine and Cleopatra project in Egypt.

Together, the companies produced 1.2 million ounces of gold in 2019.

A merger would make the joint entity one of the world’s largest and lowest-cost gold miners, according to Endeavour.

Centaimin’s shares jumped 3.3 per cent following a string of similar deals in the gold industry over the past year.

Analysts believe there are strong strategic arguments in favour of the merger. Some believe Endeavour may have to offer a higher premium after the outcome of the due diligence process.

FURTHER READING: December 2019 gold price prediction

FURTHER READING: Chinese mining giant buys Canada’s Continental Gold for $1bn

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