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Semafo acquires Savary Gold Corp.

M2 EQUITYBITES-May 2, 2019-Semafo acquires Savary Gold Corp

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Semafo Inc (STO:SMF) (TSX:SMF) reported on Wednesday that it has acquired Savary Gold Corp (Savary) by way of a three-cornered amalgamation.

Under the terms of this transaction, Savary shareholders received 0.0336 Semafo common shares for each Savary common share.

Immediately prior to this transaction, Semafo owned 39,533,333 Savary shares through a wholly owned subsidiary, representing approximately 15.4% of the issued and outstanding Savary shares on a non-diluted basis.

Also, through a wholly-owned subsidiary Semafo owned warrants exercisable for up to 3,100,000 additional Savary shares at an exercise price of USD0.05 expiring on 31 December 2021. Assuming the exercise in full of the Savary warrants, Semafo would have owned 42,633,333 Savary shares through a wholly -owned subsidiary, representing 16.67% of the then issued and outstanding Savary shares on a partially-diluted basis.

Now, as a result of this transaction, Semafo acquired 49,932,740 common shares in the share capital of the company resulting from the transaction (Amalco), representing 100% of the issued and outstanding common shares of Amalco.

The exchange ratio under the transaction implied a consideration of CAD0.10 per Savary share, based on the closing price of the Semafo shares on the Toronto Stock Exchange on 8 February 2019, and represented a premium of 100% based on the closing price of Savary shares on the TSX Venture Exchange on 8 February 2019.

This transaction value (excluding Semafo's existing 15.4% equity interest) was approximately CAD22.7m on a fully diluted in-the-money basis, representing 2.2% dilution to Semafo's shareholders.

Further to the transaction and the expected delisting of the Savary shares from the TSX Venture Exchange, Amalco has applied to cease to be a reporting issuer in each of the applicable provinces of Canada.

Semafo is a Canadian-based intermediate gold producer. It operates two mines, the Mana and Boungou Mines in Burkina Faso.

(USD1.00=CAD1.34)

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Publication:M2 EquityBites (EQB)
Date:May 2, 2019
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