Canadian rival exploration companies Nighthawk Gold and Moneta Gold have agreed to an at-market merger in a move to create a major gold developer in Canada.
According to the terms of the agreement, Moneta Gold will acquire all of Nighthawk Gold’s issued and outstanding common shares in exchange for common shares of the former.
The shareholders of Nighthawk Gold will be issued 0.42 Moneta Gold shares for each Nighthawk Gold share held.
Following the completion of the merger, the existing shareholders of Nighthawk Gold and Moneta Gold will own nearly 34% and 66%, respectively, of the new combined entity.
The combined company will be supported by 7.8 million gold ounces in indicated mineral resources and 10 million gold ounces in the inferred category.
Its portfolio will include two large-scale gold projects in Canada, namely the Tower and Colomac gold projects.
Currently, Moneta Gold owns the Tower gold project located in the Timmins region of Northeastern Ontario while Nighthawk Gold is the owner of the Colomac gold project in Northwest Territories.
The Tower project has an average potential production profile of 261,000oz per year over the first 11 years while the Colomac project has a potential production profile of 290,000oz per year over its 11.2-year mine life.
Nighthawk Gold president, CEO, and director Keyvan Salehi and Moneta Gold interim CEO and chairman Josef Vejvoda said: “We believe that the Transaction presents an exciting opportunity to create a leading gold development company by bringing together two cornerstone assets in Canada.
“The combined company will benefit from a strong balance sheet, led by a skilled leadership team, and a high-quality portfolio anchored by two robust, large-scale assets in established and emerging mining camps.”
In connection with the deal, Nighthawk Gold has signed an agreement with SCP Resource Finance, on behalf of a syndicate of underwriters.
Under the agreement, underwriters will purchase 36,765,000 subscription receipts of Nighthawk Gold each priced at C$0.34 ($0.25) for aggregate gross proceeds of C$12.5m ($9.21m).
The net proceeds of the financing will be utilised by the combined gold development company to fund the exploration and advancement of the Tower gold project and Colomac gold project.
They will also be used for working capital and general corporate purposes.
Subject to shareholder, court, and regulatory approvals along with the completion of financing and other customary conditions, the transaction is anticipated to be completed in Q1 2024.
SCP Resource Finance and Laurentian Bank Securities are Nighthawk Gold’s financial advisors while Cassels Brock & Blackwell served as the company’s legal counsel.
Maxit Capital, Evans & Evans and McCarthy Tetrault are acting as financial advisors and legal counsel, respectively to Moneta Gold.
