Gran Colombia axes merger with Gold X

Aurora Mill, Guyana. Photo courtesy of Guyana Goldfields.

Gran Colombia Gold (TSX: GCM) announced on Monday that it will no longer pursue the acquisition of all shares of Guyana Goldfields and, as a result, terminated the planned merger with Gold X.

The successful completion of the Guyana Goldfields acquisition was a condition for the merger with Gold X.

Guyana Goldfields rejected Gran Colombia's acquisition proposal and instead entered into an amended agreement with Silvercorp Metals after that company upped its offer to C$1.30 a share.

Gran Colombia and Gold X had previously identified potential to connect Gold X's wholly-owned Toroparu pre-development project and Guyana Goldfields' Aurora open-pit gold mine.

The Gran Colombia - Gold X combination would have produced approximately 275,000 oz. gold per year, which would be expected to grow to over 500,000 oz. a year through the development of the Toroparu, Aurora underground and Marmato (Gran Colombia) assets.

Midday Monday, Gran Colombia's stock was up 6.29% on the TSE. The company has a C$465 million market capitalization. Gold X was down 3.3% on the TSXV, with a C$99.3 million market capitalization.