Fresnillo moves into Canadian market after major acquisition
FTSE mining giant Fresnillo is set to break into Canada after it agreed terms to acquire gold exploration company Gold Probe Inc.
The Mexico focused mine operator will purchase Probe for CAD$780m (£423.7m) including access to its Val d’OR mining camp in Quebec.
Under the terms of the deal, Fresnillo will acquire 100 per cent of all issued and outstanding shares, with Probe shareholders receiving CAD$3.65 per share.
Fresnillo expects to finance the acquisition with existing cash resources, which stood at $1.8bn as of the end of June.
The deal is anticipated to be completed in the first financial quarter of 2026 subject to majority shareholder approval.
Octavio Alvidrez, chief executive of Fresnillo, said: “This acquisition is consistent with our disciplined approach to M&A.
“It meets our strict criteria of having a sizeable resource base with upside optionality in a region with mining history, skilled personnel and existing infrastructure.”
“We are excited to be coming to Canada, an outstanding mining jurisdiction with a global reputation for responsible development, and to the Val d’Or region with its proud history of mining.”
Transaction highlights
Alongside entry to the Val d’Or mining camp, the deal will grant Fresnillo access to Probe’s unexplored land package, including the multimillion ounce Novador gold project.
The project has the potential to produce over 200,000 ounces per annum over the next decade.
Fresnillo said it is looking to advance the project upon the transaction being completed, pledging to add a resource base of 10m ounces of gold.
It will also be given the ability to use Probe’s early-stage Detour gold project, which will leverage Fresnillo’s technical and exploration capabilities.
David Palmer, chief executive of Probe, said: “After nine years of steady progress advancing the Novador project, we believe this is an opportune moment to transfer the project to an experienced operator.”
Mexico first
The group is following in the footsteps of fellow FTSE listed mining company, Anglo American, which announced its plans to merge with Canada’s Teck Resources in a $50bn deal.
The new company, which will be known as Anglo Teck, is maintaining its London listing but will be headquartered in Vancouver.
Anglo American chief executive Duncan Wanblad, noted the move would propel the company to the “forefront” of the industry.
However, Alvidrez has insisted Mexico will remain the company’s focus, with intentions to use Canada, in particular Novador, to bolster its prospects.
He said: “While Mexico will remain central to our operating and growth strategy, Probe’s assets will meaningfully complement our existing pipeline of projects and prospects.
“We are confident that the Novador project, together with our advanced exploration projects in Mexico, will underpin Fresnillo’s long term future, further positioning us as one of the leading precious metals companies in the world.”