-- Stifel Canada on Friday maintained its buy rating on the shares of G2 Goldfields (GTWO.TO) and its C$8.50 price target after the company agreed to be acquired by G Mining Ventures (GMIN.TO) for shares worth C$3 billion.
"G Mining Ventures announced an all-share deal to acquire GTWO at an ~80% premium to Wednesday's close. The deal implies total consideration of C$3.0B, or C$10.84/sh (0.212 GMIN shares per GTWO). We are constructive on this transaction, noting combined potential of Oko West and Oko-Ghanie main to produce >500kozpa Au. We see the acquisition implying 0.66x GTWO P/NAV (consensus), higher than the ~0.45x GMIN acquired RGD for in 2024. Further, we note the G3 SpinCo (including Peters Mine) is currently being priced in at ~7-20% (prelim value estimate), providing optionality to continued discovery with a fertile property package and proven mgmt. We see this deal as a sign mid-tier producer/developer M&A is favouring infrastructure proximal, near-term production potential with exploration upside and note OMG under coverage as a natural read through; trading at 0.31x [unfunded, risked 'takeout' NAVPS of C$6.53]," analyst Cole McGill wrote.
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Price: $10.84, Change: $+0.06, Percent Change: +0.56%