Aura Minerals Inc. and Rio Novo Gold Inc. signed a merger agreement under which Aura will acquire Rio Novo's outstanding share capital by issuing 0.053 of an Aura common share for each Rio Novo share held, the companies said in a joint Dec. 18 statement.
The merger remains subject to the approval of the companies' shareholders, which will be sought during special meetings expected in February 2018. The boards of both miners recommended that shareholders vote in favor of the transaction.
Northwestern Enterprises Ltd., which owns about 52% of Aura's common shares and 65% of Rio Novo's common shares, signed a customary voting and support agreement pledging to vote in favor of the merger.
Among other stipulations, the merger deal allows Rio Novo to accept a superior proposal in certain circumstances and a 10-business day "right to match period" for Aura. The agreement also provides for the reimbursement of expenses for either party, capped at C$1 million, should the merger be terminated under certain circumstances.
The combined entity will operate under Aura's business name and will remain listed on the Toronto Stock Exchange.