Canadian gold mining and exploration company Borealis Mining has agreed to acquire its rival Gold Bull Resources in an all-share deal.
According to the terms of the definitive agreement, shareholders of Gold Bull will receive a significant premium through the transaction, with an acquisition price of about $0.6 per share or 0.93 Borealis Mining shares for each Gold Bull share.
Upon closing of the deal, Gold Bull shareholders will hold 14% of the combined entity, retaining exposure to the Sandman, the Big Balds projects, and Borealis Mining’s established mining operations.
Borealis Mining shareholders will own 86% in the newly merged entity.
Through the proposed deal, Borealis Mining aims to add Gold Bull’s Sandman gold project in Nevada to its portfolio and become a mid-tier gold producer.
The integration is also expected to generate operational synergies, with the fully equipped and permitted Borealis adsorption, desorption, and recovery (ADR) facility utilised for processing loaded carbon from the Sandman project.
This is expected to reduce capital expenditure (capex) and lower permitting risks, as outlined in the 2023 preliminary economic assessment (PEA).
In addition, the transaction will add 433,000 ounces of indicated gold and 60,800 ounces of inferred gold to Borealis Mining’s portfolio.
Located around 30km northwest of the mining town of Winnemucca, the Sandman gold project is expected to require an initial capital of $31.6m. The project will have an initial mine life of nine years.
The PEA estimated an 81% post-tax internal rate of return (IRR) and a net present value (NPV) of $121m, with an estimated annual production of 37,900 ounces of gold.
The project also offers significant exploration upside, with a large, underexplored land package featuring multiple untapped geophysical and geochemical targets.
Borealis Mining CEO Kelly Malcolm said: “Our team has internally validated both the existing 2021 mineral resource and the economics presented in the 2023 PEA and have seen potential near-term upside opportunities in both.
“The Sandman project benefits from a great location close to Winnemucca, NV, strong historical and recent metallurgical results, a massive historical dataset, and robust proximal infrastructure.”
Gold Bull acquired the Sandman gold project from Newmont in 2020. The project’s four pit-constrained resources collectively contain 494,000 ounces of gold.
The boards of directors of both companies have unanimously approved the transaction.
Gold Bull CEO Cherie Leeden said: “The merger allows our shareholders to maintain exposure to our Sandman and Big Balds Projects through a meaningful ownership stake in the combined company while gaining exposure to the Borealis Mine which is a fully permitted and near term producing gold asset, also located in Nevada.”
Subject to customary, regulatory, court, and shareholder approvals, the transaction is expected to close in early 2025.
