Adamus Resources Merges With Endeavor

Adanus Resources Ltd, a gold mining company in the Western Region has entered into a definitive Merger Implementation Agreement with Endeavor Mining, a Canadian mining firm to create a new gold mining company..

Endeavour, a gold producer and is also said to hold an extensive exploration land position and various advanced-stage development gold projects in West Africa.

Its growth strategy, supported by financial resources and management's company building expertise, has enabled it to become an intermediate gold producer through strategic acquisitions.

The merger will position the partners as one of the leading West African gold production, development and exploration companies as a platform for future growth and acquisitions.

Endeavour intends to invest at least $160 million from its current cash balance to relieve the constraints of Adamus Nzema Gold project finance structure including the repayment of the $60 million project loan and $100 million towards the reduction of hedged gold volumes.

The two companies said the merged entity was forecasting a 2011 gold production of 172,000 ounces from Youga Gold Mines in Burkina-Faso and Nzema Gold Mine in Ghana.The gold production rate is expected to be approximately 250,000 ounces per year by the end of 2013.

Adamus’ proven mine building track record, having successfully commissioned the Nzema Gold Mine, would enhance the construction of the Agbaou feasibility stage project in Côte d’Ivoire.

The entity has a proforma financial strength totaling US$516 million from Endeavour’s US$195 million cash and marketable securities, Adamus’ US$21 million cash, a new, undrawn, credit approved US$200 million revolving corporate loan facility and approximately US$100 million from any future exercise of all Endeavour options.

Mr Neil Woodyer from Endeavor will be the appointed the Chief Executive and Mark Connelly from Adamus will assume the position of Chief Operations Officer of the merged entity.

For his part, Mr Woodyer said the combination would provide a stronger and better position for the company with financial strength through strategic acquisitions saying “merging with Adamus is a significant step as we seek to become mid-tier gold producers.”

“Our financial strength will unlock value and increase operational flexibility through our ability to repay the Nzema project facility, significantly reduce Nzema gold hedge and fully pay the development of Agbaou,” he said.

Upon completion of the scheme, existing Endeavour shareholders and Adamus shareholders will own approximately 47.2 per cent and 52.8 per cent respectively, of the issued common shares of the Merged Entity.