Eldorado to Buy European Goldfields For $2.4B

Canadian gold miner Eldorado Gold EGO will add to its European gold reserves buy acquiring European Goldfields for $2.4 billion in cash and stock, the companies announced on Sunday evening. European Goldfields has attributable gold reserves of 9.2 million ounces and multi-stage assets located in Greece, Romania and Turkey, Eldorado said in a statement. The company currently operates an active mine in Greece and is developing two projects there and one in Romania. Eldorado is paying a premium of approximately 56.5% to European Goldfields' 20-day volume weighted average price ("VWAP") based on the VWAPs of both companies onweighted average price ("VWAP") based on the VWAPs on the Toronto Stock Exchange for the period ending December 5, 2011, the last trading day before European Goldfields announced it had received preliminary approaches, it said in the statement. The combined company will produce over 1.5 million ounces of gold by 2015. Eldorado's dividend will remain unchanged with enhanced ability for growth as European Goldfields' development projects are built, the company said. The transaction is expected to be completed in early 2012. "We are extremely pleased to have reached this mutually beneficial transaction with European Goldfields. Integration of European Goldfields' business with our own will provide Eldorado with the dominant gold mining business in the Aegean Region and the combined business will constitute the leading low cost, high growth intermediate gold producer globally. We are particularly pleased to be partnering with Aktor, Greece's largest construction company, to help ensure effective, safe and timely development of our operations in Greece," said Paul Wright, President and Chief Executive Officer of Eldorado.