Eldorado Gold announced yesterday that it will acquire European Goldfields for C$2.5bn (£1.55bn) through a share swap that it aims to complete by the end of February.
The deal scuppers a previous agreement signed by the Qatari sovereign wealth fund and European Goldfields that saw the former acquire 9.9 per cent of the miner’s shares and agree to give it a $600m loan and a further equity injection of $150m.
Yesterday, Tim Morgan-Wynne, finance director of European Goldfields, implied that Eldorado is likely to provide most of the cash for capital expenditure but did not wholly rule out a Qatari contribution.
“Eldorado brings a strong balance sheet with cash reserves that is sufficient to fund a development pipeline,” he said. But he added that the company is still in touch with Qatar Holdings and that the vote on its financing offer had been “postponed”, not cancelled.
And he did not lay out a financing framework to achieve the miner’s plan of more than doubling production by 2015.