Read on Twitter
1/ $EDV.TO acquiring $TGZ.TO
Really like this deal as an EDV shareholder
-Massive re-rate pot. w/ future FTSE 100 inclusion,
FCF generation, healthy BS and very attractive valuation.
EDV mgmt. are excellent operators, proven integrators and solid capital allocators IMO. https://twitter.com/EndeavourMining/status/1328236629895618560
Really like this deal as an EDV shareholder
-Massive re-rate pot. w/ future FTSE 100 inclusion,
FCF generation, healthy BS and very attractive valuation.EDV mgmt. are excellent operators, proven integrators and solid capital allocators IMO. https://twitter.com/EndeavourMining/status/1328236629895618560
2/
Deal Notes:
-EDV paying C$2.6B (all-share) or ~0.8x cons. P/NAV
-Small premium paid (5% on last price, 9% on 20d VWAP)
-P/NAV accretive (5.7%), CF & EPS accretive in ’23 (’21 and ’22 neutral)
-Closing expected in Q1 2021
-Break-fee: $40M
-Potential for significant synergies
Deal Notes:
-EDV paying C$2.6B (all-share) or ~0.8x cons. P/NAV
-Small premium paid (5% on last price, 9% on 20d VWAP)
-P/NAV accretive (5.7%), CF & EPS accretive in ’23 (’21 and ’22 neutral)
-Closing expected in Q1 2021
-Break-fee: $40M
-Potential for significant synergies
3/ Deal Notes cont'd:
-Condition: EDV granted waiver for change of control of gold purchase and sale agreement w/ $FNV
-Nov. 16: TGZ trading at 1.5% discount to implied acq. price (chance of interloper low IMO)
-Condition: EDV granted waiver for change of control of gold purchase and sale agreement w/ $FNV
-Nov. 16: TGZ trading at 1.5% discount to implied acq. price (chance of interloper low IMO)
4/ Combined company
-Creates a top 10 gold producer at 1.5 Moz/yr @ <$900/oz AISC (Cons. ’21: 1.6Moz @ $863/oz AISC)
-Very strong project development pipeline and exploration potential
-No intention to grow past 2Moz/yr pdn
-Seeking LSE Listing and FTSE 100 inclusion post closing
-Creates a top 10 gold producer at 1.5 Moz/yr @ <$900/oz AISC (Cons. ’21: 1.6Moz @ $863/oz AISC)
-Very strong project development pipeline and exploration potential
-No intention to grow past 2Moz/yr pdn
-Seeking LSE Listing and FTSE 100 inclusion post closing
5/
Huge FCF: Cons. ’21 @ $1,222M (~19% FCF Yield) to fund org growth
Balance Sheet (pro-forma): Ample liquidity and low net debt ~$279M (0.3x ND/EBITDA LTM) – net cash by mid-2021 at current gold prices
-Comprehensive debt refinancing up to $800M reduces financing cost ~$40M
Huge FCF: Cons. ’21 @ $1,222M (~19% FCF Yield) to fund org growth
Balance Sheet (pro-forma): Ample liquidity and low net debt ~$279M (0.3x ND/EBITDA LTM) – net cash by mid-2021 at current gold prices
-Comprehensive debt refinancing up to $800M reduces financing cost ~$40M
6/
Capital Allocation
-Maintain dividend at min. yield of 1.6% (avg. yield vs. peers)
-Will revisit dividend policy and capital allocation priorities once net cash >$250M (exp. ~mid-2021)
Valuation – Extremely undervalued vs. peers across P/NAV, EV/EBITDA, FCF Yield
Capital Allocation
-Maintain dividend at min. yield of 1.6% (avg. yield vs. peers)
-Will revisit dividend policy and capital allocation priorities once net cash >$250M (exp. ~mid-2021)
Valuation – Extremely undervalued vs. peers across P/NAV, EV/EBITDA, FCF Yield
7/ Potential Catalysts - lots to look fwd to in 2021!
-LSE Premium Listing & FTSE 100 Inclusion (late 2Q21 – early 3Q21)
-EDV maiden div. pmt 1Q21
-Approval and closing of merger 1Q21
-Fetekro PFS Early 2021
-Fetekro/Kalana pdn decision
-Afema JV maiden resources 1Q21
-more...
-LSE Premium Listing & FTSE 100 Inclusion (late 2Q21 – early 3Q21)
-EDV maiden div. pmt 1Q21
-Approval and closing of merger 1Q21
-Fetekro PFS Early 2021
-Fetekro/Kalana pdn decision
-Afema JV maiden resources 1Q21
-more...
