Each one in plain English, with the numbers worked through for a shareholder.
4 Apr 2016business combination▲ GoodMajor
The takeover closed on 1 April 2016. Tahoe issued 69,239,629 shares at 0.1467 per Lake Shore Gold share, making the company a wholly-owned subsidiary and leaving former holders with 23.32% of Tahoe's 296,900,457 shares; the Lake Shore Gold listings on the TSX and NYSE MKT were withdrawn. The $103,181,000 of 6.25% debentures stayed listed and now convert into Tahoe shares at the same ratio, and Tahoe elected to redeem them. From the US listing in August 2011 to this exit was four years and eight months; from first commercial production at the Timmins deposit in January 2011, about five years and three months.
Lake Shore Gold shareholders approved the Tahoe arrangement with about 95.1% of votes cast in favour, with the court's final order sought for 1 April 2016.
Both ISS and Glass Lewis recommended shareholders vote for the Tahoe arrangement, citing the strategic rationale, the implied premium and better trading liquidity in the combined company.
Final annual resource and reserve update before the takeover. Timmins West indicated resources rose to 903,400 ounces (5,775,000 t at 4.9 g/t) from 694,600 a year earlier on the 144 Gap addition, while its probable reserves fell to 391,800 ounces from 509,700 as mining outpaced conversion; Bell Creek held 679,900 ounces measured and indicated with reserves up to 309,300 ounces from 263,600. Across both mines: 1,583,300 ounces measured and indicated, 1,013,300 inferred.
First resource for the 144 Gap deposit: 301,700 ounces indicated (1,734,000 t at 5.41 g/t) and 319,200 ounces inferred (1,914,000 t at 5.19 g/t), sixteen months after the October 2014 discovery hole. Intercepts inside the resource but not yet counted in it included 49.92 g/t over 22.7 m and 31.27 g/t over 18.5 m.
Tahoe Resources agreed to acquire Lake Shore Gold outright, all in shares: 0.1467 of a Tahoe share for each Lake Shore Gold share, worth C$1.71 a share on Tahoe's 5 February close and implying equity value of C$945 million. That was a 14.8% premium to the 5 February close and 28.6% to the 4 February close, or 25.7% and 30.4% against 20-day volume-weighted averages, leaving Lake Shore Gold holders about 26% of the combined company. It was announced the same day as the maiden 144 Gap resource.
The first 13 holes (1,600 m) of a 30,000 m programme at the Whitney project - the first drilling there since the Temex acquisition closed in September 2015 - confirmed and expanded the shallow 110 Zone south of the Hallnor shaft, with 29.42 g/t over 12.0 m, 8.45 g/t over 9.5 m and 6.45 g/t over 9.2 m, all within 100 m of surface.
Preliminary 2015 cash operating cost of about US$580 an ounce sold beat the better-than-US$650 target and all-in sustaining cost of US$870 beat the below-US$950 target, on total production costs of about $135.0 million. A third consecutive year of costs coming in under guidance.
The TSX approved the debenture buyback, for up to $10,350,000 of principal, running from 15 December 2015 to 14 December 2016 with daily purchases capped at $24,000 of principal.
Announced a normal-course bid to buy back and cancel up to 103,500 of its 6.25% convertible debentures due September 2017, about 10% of the public float, funded from working capital. Management expected to end 2015 with close to $100 million of cash - the company was now buying its own debt back rather than issuing more.
Sixty holes and 11 wedge cuts (39,050 m) across the 144 trend: the first underground hole into the western part of the 144 Gap cut 6.85 g/t over 59.2 m, delineation holes returned 79.52 g/t over 8.3 m and 6.98 g/t over 36.1 m, and surface drilling discovered new gold at 144 South 450 m below and northeast of previous holes.
Nine-month 2015 production of 136,200 ounces from 952,000 t at 4.6 g/t and 96.7% recovery, with estimated cash operating costs of US$567 an ounce sold and all-in sustaining costs of US$844 - both running better than the full-year targets, and the at-least-180,000-ounce guidance intact.
The first ten underground holes (4,771 m) from the new exploration drift into the 144 Gap returned 7.81 g/t over 10.4 m, 6.29 g/t over 36.8 m, 7.83 g/t over 18.8 m and 10.97 g/t over 14.4 m, with the drift over 90% complete and a first resource still targeted for early 2016.
Temex shareholders approved the arrangement with about 88% of votes cast in favour, clearing the way to close on the court's final order. Lake Shore Gold would issue roughly 20 million shares, under 5% of its own count, to take all of Temex.
Took 7,500,000 IDM Mining shares plus warrants over 20,000,000 more in settlement of IDM's obligation from a 2013 property sale, lifting Lake Shore Gold to 31,952,290 shares or 36.3% of IDM on a partly diluted basis, and agreed to buy 2,500,000 units in IDM's placement.
Signed a binding arrangement agreement with Temex on the 16 July terms, after Temex terminated an agreement it had signed with Oban Mining on 29 June. Lake Shore Gold lent Temex the money to pay Oban its $691,856 break fee - it funded the exit from the rival deal to get the asset.
Two announcements in one filing. Preliminary first-half cash operating cost of US$551 an ounce sold and all-in sustaining cost of US$810. And a binding proposal to buy Temex Resources at 0.105 Lake Shore Gold shares per Temex share, worth $0.13 on the 15 July close - the target being Temex's 60% of the Whitney joint venture with Goldcorp next door to Bell Creek (218,100 ounces measured at 7.02 g/t, 490,500 indicated at 6.77 g/t, 170,700 inferred at 5.34 g/t) plus 100% of the Juby project.
First-half 2015 production of 95,600 ounces from 627,000 t at 4.9 g/t and 96.7% recovery, with 98,500 ounces sold at US$1,208. Full-year guidance was raised to at least 180,000 ounces and unit cost targets cut to below US$650 cash and US$950 all-in sustaining; cash and bullion stood at about $82.0 million.
Made the final payment on the Sprott senior secured debt, clearing the $70 million facility arranged in mid-2012 to fund the Bell Creek mill expansion. Three years from first drawdown to no secured debt at all, with the C$90 million of convertible debentures due September 2017 still outstanding.
Expanded the 144 Gap drill programme, opened new exploration along the 144 trend to the southwest and added an underground programme at Bell Creek. Management framed it as the turn from stabilising and deleveraging to spending on growth, after debt repayment and cost targets had been met.
Twenty-two holes and five wedges (29,089 m) took the 144 Gap to 400 m along strike and 400 m of vertical height, with the high-grade core now at least 300 m tall. Intercepts included 11.79 g/t over 21.1 m within a broader 5.74 g/t over 55.0 m, 8.81 g/t over 8.2 m and 8.14 g/t over 15.1 m.
First-quarter 2015 cash operating cost came in at about US$509 an ounce sold and all-in sustaining cost at US$748 - 18% and 22% better than the same quarter of 2014, and far inside full-year targets of US$650-700 and US$950-1,000.
Filed an updated Bell Creek reserve at 31 December 2014 of 1,792,295 t grading 4.6 g/t for 263,608 ounces mined to surface, of which 172,228 t at 4.5 g/t is proven, using a US$1,100 gold price and a 0.90 exchange rate.
Ten holes and a wedge (11,092 m) defined a thick, high-grade core inside the 144 Gap over 250 m of vertical height, 75-100 m wide and 50-75 m along strike, with 5.36 g/t over 47.0 m (including 9.70 g/t over 18.4 m), 4.09 g/t over 56.9 m and, near the northeast limit, 78.44 g/t over 1.9 m.
Tripled the 144 Gap's minimum strike length, taking the zone to 350 m along strike and 350 m down dip, and pushed mineralisation 200 m northeast to within 500 m of Thunder Creek (3.68 g/t over 18.0 m, 6.56 g/t over 12.4 m, and 100.00 g/t over 0.40 m). Six surface rigs were on site with 90,000 m planned for 2015.
Preliminary 2014 cash operating cost of about US$595 an ounce sold beat guidance of US$675-775 and was 22% better than 2013, with all-in sustaining cost at US$875 against a US$950-1,050 target and total production costs of about $120 million versus $128 million guided. This is the year the mine turned into a free-cash-flow generator.
Guided 2015 to 170,000-180,000 ounces at cash operating costs of US$650-700 and all-in sustaining costs of US$950-1,000 an ounce, with grades easing to about 4.4 g/t and total production costs near $125 million. Aggressive drilling at the 144 Gap was budgeted with the aim of defining a first resource.
Four more holes (4,898 m) at the 144 Gap returned 7.18 g/t over 24.0 m including 12.61 g/t over 11.5 m, 5.09 g/t over 24.8 m and 5.92 g/t over 20.7 m, confirming minimum dimensions of 100 m along strike by 250 m down dip. The programme was expanded from 10,000 to 15,000 m with a fourth rig.
Forty-eight holes (13,916 m) at Timmins West confirmed and extended the second fold-nose structure at the Timmins deposit (12.32 g/t over 9.3 m including 27.70 g/t over 3.3 m, and 11.72 g/t over 9.7 m) and found new gold below the resource in the footwall and ultramafic zones, including 38.56 g/t over 3.1 m.
