Centamin Egypt (LON:CEY) said this morning it is buying PLUS-listed Sheba Exploration (LON:SHBA) for £7.48 million in cash and shares.
The deal, which values Sheba shares at 6.15 pence each, has been endorsed by the directors and has the backing of investors holding around 36 per cent of the stock.
The acquisition is all part of Centamin’s strategy to expand beyond the world-class Sukari project in Egypt.
Sheba owns and operates three gold and base metal exploration licences in the regional state of Tigray, in Northern Ethiopia.
The licences lie within the Arabian Nubian Shield, which hosts not only Centamin’s 14.5 million ounce resource at Sukari, but other significant gold and copper deposits.
Centamin chairman Josef El-Raghy said: “The strategic acquisition of Sheba marks the broadening of our asset portfolio beyond Sukari, as well as heralding our entry into Ethiopia, a highly prospective gold district where we believe the Sheba licences represent some of the most prospective in the country.
“Our understanding and experience in exploration and development in the Arabian Nubian Shield, together with Sheba’s operating history in Ethiopia since 1998, provides a compelling combination of growth and diversity for all shareholders.
“With this combination and our strong financial position we believe we can rapidly accelerate the development of Sheba’s projects.
“We look forward to working with the Sheba team and the Government of Ethiopia in creating a sustainable and significant mining district in Ethiopia.”