Gallery applauds Iamgold offer

Shareholders of Aussie gold producer Gallery Gold (GLYGF-O, GGN-A) have approved a $267-million takeover bid by Iamgold (IMG-T, IAG-N).

More than 99% of the votes cast at a shareholders meeting favoured the deal, which will see the two combine at a rate of 1 Iamgold share for every 22 shares of Gallery. In the end, Gallery shareholders would own just shy of 15% of the new Iamgold.

“We are very pleased with the outcome of the Gallery shareholder vote. Once the Australian courts have formally approved the shareholder decision on March 13, 2006, the acquisition is complete,” said Iamgold president and CEO Joe Conway in a prepared statement.

The combined entity will sport annual production of more than 575,000 oz. of gold from interests in five operating mines in Africa. Total reserves will tip the scales at around 4.6 million oz. within measured and indicated resources of some 14.5 million oz.

The new Iamgold will also have US$130 million in cash and bullion with little debt.

Iamgold currently has interest in four operating mines in West Africa and South America, including a 38% stake in the Sadiola gold mine and a 40% interest in eth Yatela gold mine, both in Mali. In Ghana it holds a 18.9% interest in both the Tarkwa and Damang gold mines. The comapn also has a 1% royalty interest in the Diavik Diavik mine, in the Northwest Territories, owned by Rio Tinto (RTP-N, RIO-L) and Aber Diamond (ABZ-T, ABER-Q)

Gallery’s Mupane mine in Botswana produces around 125,000 oz. of gold per year at a cash cost of US$280 apiece. The open-pit mine is home to reserves of 6 million tonnes grading 3.2 grams per tonne, for 600,000 contained ounces.