Expert Analysis Rob Chang, Cantor Fitzgerald (12/17/12) "Primero Mining Corp. has entered into a definitive agreement to acquire Cerro Resources NL in an all-stock deal valued at approximately $119M. . .the addition of the feasibility-stage, 69%-ownership stake in the Cerro del Gallo project adds approximately 1 Moz gold equivalent in the 2P category and 1.3 Moz gold equivalent in the Measured and Indicated category. . .this acquisition notably increases Primero's resource size and production profile. We maintain our Buy rating and $8.95 target price."
Barry Allan, Mackie Research Capital (12/14/12) "Primero Mining Corp. has entered into an agreement to acquire Cerro Resources NL, an exploration company whose primary asset is the feasibility-stage Cerro Del Gallo project. . .the company is getting a good deal on a feasibility-stage project. . .the acquisition of Cerro Resources will transform Primero into a Mexican-based multi-asset producer, with annualized production growth of 24% over the next four years to 260 Koz by 2016."
Richard Gray, Cormark Securities (12/14/12) "Primero Mining Corp. is acquiring Cerro Resources NL in an all-share valued at $114M. . .we like this deal for the company as it adds a simple, undervalued development-stage project in Mexico, a region where it has operating experience and expertise. . .this is a low-risk first step for the company as it looks to grow to midtier status through acquisition. . .we believe the shares could trade higher as the Cerro del Gallo project is digested. . .we are maintaining our Buy rating."
Michael Gray, Macquarie Capital Markets (12/14/12) "Primero Mining Corp. announced a friendly deal with Cerro Resources NL. . .Cerro's primary asset is its 69% interest in the Cerro del Gallo project, which contains 1 Moz Au eq in reserves and 1.3 Moz Au eq in Measured and Indicated resources. . .the acquisition diversifies Primero into a two-asset company in Mexico. . .we reiterate our Outperform recommendation."
Steven Butler, Canaccord Genuity (12/13/12) "Primero Mining Corp. has announced a definitive agreement to acquire all outstanding shares of Cerro Resources NL in an all-share transaction valued at $119M. . .following the close of the transaction, the company will own 69.2% of the Cerro del Gallo project with Goldcorp Inc. holding the remaining 30.8%. . .the acquisition of Cerro del Gallo is expected to be very accretive to reserves, production and valuation on a per share basis."
CJO Price at posting:
12.5¢ Sentiment: Hold Disclosure: Held
