GTBAF - Great Bear Resources (GTBAF)(GBR:CA) - Great Bear Shares Rise on Acquisition Announcement Rating Lowered

Kinross Gold Corporation to acquire Great Bear Resources. Great Bear announced a definitive agreement to be acquired by Kinross (TSX: K, NYSE: KGC) by way of a court-approved plan of arrangement. The transaction is expected to be completed in the first quarter of 2022, subject to approval by Great Bear shareholders, receipt of court and regulatory approvals, and satisfaction of certain closing conditions. We think the transaction is a win for both companies who have a shared vision of the potential for a multi-deposit mine complex at Dixie, including a potential high-grade open pit mine and a long-life underground mine.Terms of the transaction. Great Bear shareholders will have the option to receive either: 1) C$29.00 in cash, or 2) 3.8564 Kinross shares per Great Bear share, subject to pro-ration, up to aggregate maximums of 75% cash and 40% Kinross shares on a fully diluted basis. The agreement also provides contingent consideration for Great Bear shareholders based on certain milestones.Investor call and webcast. Kinross and Great Bear hosted an investor call and webcast during which they discussed the transaction’s strong strategic rationale, Kinross' three parallel objectives for advancing the Dixie project, and benefits for both company’s shareholders. Kinross can fund the cash portion of the acquisition with existing liquidity, including cash and available capacity on its revolving credit facility.Rating is Market Perform. Following the transaction announcement, Great Bear Resources (OTCQX, GTBAF, US$23.00) shares rose 27% on December 9, while shares trading on the Canadian exchange (TSX-V, GBR, C$28.69) rose 25%. We have lowered our investment rating to Market Perform from Outperform based on our view the shares are trading near fair value. We think this is an exciting outcome for both Great Bear and Kinross shareholders and expect the transaction to close. Read More >>