NexGold and Signal Gold to combine
Canadian mining companies NexGold and Signal Gold on Thursday announced a merger to create a near-term developer eyeing more than 200 000 oz/y of production.
The combined entity would advance NexGold’s Goliath gold complex project, in northern Ontario, and Signal’s Goldboro project, in Nova Scotia.
Combined, the business would have 4.7-million gold ounces of measured and indicated mineral resources and 1.3-million gold ounces of inferred mineral resources.
NexGold president Morgan Lekstrom said the transaction reflected the execution of the company’s strategy of targeting high-value gold projects with potential production of more than 100 000 oz and a capital expenditure of C$400-million.
“With the transaction, we have significantly derisked the combined company as it will no longer be a single asset company but rather a company with a pipeline of low-cost, low-risk, high-return mine development and expansion projects in Canada. Not only do we have a path to construction on both projects when project financing is obtained, but both historic gold districts have demonstrated tremendous expandability and upside potential that could contribute to larger, longer-life projects,” he said.
The combined company’s board of directors will be led by Jim Gowans as chairperson and will comprise six board members nominated by NexGold and two nominated by Signal. Reporting to the board of directors, the combined company will be managed by Signals’ Kevin Bullock as president and CEO, NexGold’s Jeremy Wyeth as COO, and NexGold’s Orin Baranowsky as CFO.
NexGold would acquire Signal in an all-share transaction. Each Signal share will be exchanged for 0.1244 of a NexGold share. Upon completion of the transaction, existing NexGold and Signal shareholders will own about 71% and 29% of NexGold, respectively, on a fully diluted in-the-money basis, before the completion of a concurrent financing of C$11.5-million.
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