Latest M&A Confirms Gold Mining Bull Market
Welcome to Mining Stock Daily. This is your host, Trevor Hall
Today is Monday, May 11th.
Last Wednesday, after June gold was manipulated below $1700 to as low as $1684, the Mining Stock Journal averred that it would not stay below $1700 for long. On Thursday and into early Friday morning, June gold shot up to $1736. Alas on Friday the gold price was victimized by the customary manipulated price take down that occurs every month before and after the Non-Farm Employment report is released. After trading as low as $1704, gold is trading at $1708 as this is being written. The Mining Stock Journal is confident gold will this week will trade above last week's $1736 high. Silver outperformed last week, as the hedge fund algos piled into silver futures in correlation with stocks and the computerized trading view that a "V" shaped economic recovery is coming. For the week silver was up 5% while the gold/silver ratio dropped to 108. The Mining Stock Journal noted that a component of silver's performance last week reflected the market's acknowledgement that silver is a monetary metal. The newsletter added that it expects a huge move in the entire precious metals and mining stock sector but especially in silver.
We’ll get to the news out of the miners and explorers here in just a quick moment, but first a quick mention of today’s sponsor.
This episode of Mining Stock Daily is brought to you by... Western Copper and Gold
Western Copper and Gold is focused on developing the world-class Casino project in Canada's Yukon Territory. The Casino project consists of an impressive 10 billion pounds of copper and 18 million ounces of gold in an overall resource. Last week, Western announced the launch of a non-brokered private placement for gross proceeds of up to $3.3 million through the issuance of 3 million flow-through common shares at a price of C$1.12 per flow-through share. This morning, that financing was increased to about $4.5 million. Western Copper and Gold trades on the TSX and the NYSE American with WRN. Be sure to follow the company via their website, www.westerncopperandgold.com.
And here’s what you need to know this morning …
Merger and acquisition news hit the tape this weekend with two important pieces of information.
SSR Mining and Alacer Gold announced they have entered into a definitive agreement to combine in an at-market merger of equals. The combined entity will continue as SSR Mining Inc. and will be headquartered in Denver, Colorado with a corporate office in Vancouver, B.C. Pursuant to the Transaction, Alacer shareholders will receive 0.3246 SSR Mining shares for each Alacer share held. The Exchange Ratio, together with closing prices for both SSR Mining and Alacer common shares on the Toronto Stock Exchange on May 8, 2020, implies consideration of C$8.19 per Alacer common share and a combined market capitalization of approximately $4.0 billion. News Release
Adriatic Metals announced they have a binding letter agreement to acquire all the issued share capital of Tethyan Resource Corp. Under the agreement, each Tethyan share holder will receive .166 Adriatic share for each Tethyan share owned. In addition, Adriatic will immediately provide a secured convertible loan of up to 1.3 million euros in three tranches to enable Tethyan to close the transaction for acquisition of the Serbian company which holds parts of the Kizevak and Sastavci deposits. Shares of Adriatic were up in European trading following the news yesterday.
And finally, in a twist, Gran Colombia Gold announced it has signed a definitive agreement to complete a business combination with Gold X Mining and then, in combination, acquire all of Guayana Goldfields issued and outstanding shares. You probably remember Silvercorp Metals announced they were set to acquire Guayana Goldfields back on April 27th. Under the terms of the Proposal, Gran Colombia proposes to acquire all of the issued and outstanding shares of Guyana Goldfields at a share exchange ratio of 0.142 Gran Colombia shares for each Guyana Goldfields share, implying a value of C$0.90, a premium of ~29% to the closing price of the Guyana Goldfields shares on the Toronto Stock Exchange on May 8, 2020 and a ~50% premium to the headline value of the C$0.60 per share offered in the contemplated transaction with Silvercorp. In addition, Gran Colombia can provide Guyana Goldfields with a loan of up to US$15 million with a defined use of proceeds related to ongoing operations at the Aurora Underground Project, as well as for certain working capital and general corporate purposes. Concurrently, Gran Colombia will acquire the remaining 81% of the issued and outstanding shares of Gold X that it does not already own at a share exchange ratio of 0.500 Gran Colombia shares for each Gold X share, implying a headline value of C$3.17, representing a premium of 15% to the closing price on the TSX Venture Exchange on May 8, 2020, and a premium of 41% to the volume-weighted average price of Gold X shares over the 20 trading days ended on the TSX Venture Exchange on May 8, 2020. News Release
So these M&A announcements come on the back of the TMAC Resources announcement on Friday that they had entered into an agreement to be acquired by Shandong Gold Mining, a Chinese company. So lots of moving pieces this morning and I’m sure we haven’t seen the last of it throughout this Spring and Summer. So stay tuned.
In exploration news, Galways Metals reported more assay results from its resource drilling at the Richard Zone at the Company’s Clarence Stream project in southwest New Brunswick. Results included 4.6 g/t gold over 13 meters and 5.9 g/t gold over 12 meters. The latest drilling was undertaken at 20-30 metre centres stepping out from the discovery hole, to prove there is good continuity, to identify the plunge of the veins, and to bring in indicated resources. Galway Metals trades on the TSX Venture with GWM and on OTC market with GAYMF.
MacDonald Mines Exploration also shared drill results this morning. These come from its Winter 2020 drilling program at the SPJ property east of Sudbury, Ontario. Highlights from this morning included1.5 g/t gold over 25.15 meters and 24 g/t gold over .66 meters. The company says results are indicating that gold mineralization in the North Pit area remains open in all directions and that the thickness of the mineralization zones remains relatively constant with increasing depth. To date, mineralization in the North Pit area has been traced over more than 200 metres down-dip and up to 150 metres laterally along strike. MacDonald Mines Exploration trades on the TSX Venture with BMK and on the OTC markets with MCDMF. News Release
SolGold announced this morning it as entered into a 1% $100 million Net Smelter Returns Financing with Franco-Nevada, with an option to upsize the financing to US$150 million for a 1.5% NSR at the Company's election, with reference to the Company's flagship Alpala copper-gold project and the remainder of the Cascabel license in northern Ecuador. Concurrently with the entering into of the NSR Financing Agreement, SolGold and Franco-Nevada have also entered into a US$15 million secured Bridge Loan Agreement of immediately available funds as an initial advance prior to closing the NSR Financing Agreement. The full amount of the Advance will be disbursed by Franco-Nevada to SolGold today.
That’s it from me this morning. We’ll be back throughout the rest of the day today and tomorrow with more commentary. Be sure to hit that subscribe button if you have not done so already.
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