NexGold Mining and Signal Gold have agreed to merge in a move to form an advanced near-term gold developer with a combined 4.7 million gold ounces of measured and indicated resources.
The enlarged company is expected to achieve an annual output of 200,000 ounces of gold. It will have an additional 1.3 million ounces of inferred resources.
According to the terms of the definitive arrangement agreement, each Signal Gold shareholder will receive 0.1244 NexGold shares for every Signal Gold share held.
Following the completion of the proposed transaction, NexGold shareholders will own approximately 71% of the combined company, with Signal shareholders holding the remaining 29%.
Through the transaction, the newly combined entity will control two near-term development projects, namely NexGold’s Goliath gold complex in Northern Ontario, Canada and Signal Gold’s Goldboro gold project in Nova Scotia, Canada.
Both projects hold approved environmental assessments and are slated to complete their permitting processes by 2025.
The anticipated merger is also projected to explore a significant growth potential, as both projects are located on a combined 60,000-hectare land package.
Signal Gold CEO and president Kevin Bullock said: “I believe that the Transaction brings together two cornerstone Canadian gold projects and presents an exciting opportunity to create a leading gold development company in Canada during a time of increasing gold prices.
“The combined company will be led by an experienced and skilled leadership team and will benefit from a strong balance sheet.”
The Goldboro project is expected to have around an 11-year open-pit life of mine with an average gold production of 100,000 ounces per year.
Based in Canada, NexGold Mining holds several projects across Canada, including the Weebigee-Sandy Lake gold project joint venture (JV), and grassroots gold exploration property Gold Rock.
The gold-focused company also owns a 100% stake in the high-grade Niblack copper-gold-zinc-silver VMS project, located near tidewater in southeast Alaska.
NexGold president Morgan Lekstrom said: “With the Transaction, we have significantly de-risked 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.”
Subject to court and shareholders’ approval along with regulatory approvals, the merger is anticipated to be completed in December 2024.
For the transaction, Fiore Management & Advisory is NexGold’s adviser, with DuMoulin Black serving as legal counsel. BMO Capital Markets is acting as financial adviser to Signal Gold, with Cassels Brock & Blackwell providing legal counsel.
