Early Friday morning Pretium Resources Inc. announced it was buying assets from Silver Standard Resources Inc. for $450-million. Later in the afternoon it became clear just exactly how it plans to pay for it: an IPO.
Pretium plans to use a minimum of $215-million in cash to pay for the deal, and the remaining portion will come from the IPO, meaning the deal size could come in around $235-million if all goes well.
Given the troubles of some recent IPOs, you might wonder why Pretium is going ahead with its offering now. A definitive answer hasn't been provided, but it likely has something to do with Pretium's resource focus. A few other resource IPOs in the market right now aren't faring too poorly.
Proceeds from the deal will be used to fund the purchase of the Snowfield and Brucejack gold and silver projects located in British Columbia.
CIBC World Markets is leading the offering.
Tim Kiladze