Canadian-headquartered exploration and development company Southern Empire Resources has entered into a binding agreement to acquire all issued and outstanding shares of MAS Gold, a Canadian exploration company.
Each shareholder of MAS Gold will receive one common share of Southern Empire for every 8.5 common shares of MAS Gold. On completion of the transaction, Southern Empire will issue a total of 5,828,090 shares to the shareholders of MAS Gold. The 8.5:1 conversion ratio represents an offer price of $0.145 per MAS Gold share, which is a premium of 21% of MAS Gold’s closing price as of 10 July.
MAS Gold has several high-quality assets extending along 130km of La Ronge Gold Belt in Saskatchewan, Canada, including the North Lake gold deposit and the Greywacke North gold deposit. North Lake contains 417,000oz of gold and the Greywacke North deposit contains 95,699oz. Southern Empire is acquiring these properties in a prospective mining belt in Canada, while MAS Gold has some potential exploration and expansion opportunities across its portfolio.
The combined entity formed by this acquisition will have a strong balance sheet, with no debt and a cash position of around $5.5m – this will be used to target expansion opportunities as well as exploration and development on all of Southern Empire’s projects.
The transaction remains subject to due diligence by each party, shareholder approval, and the applicable regulatory and TSX Venture Exchange approvals. If it goes ahead, Southern Empire will have expanded its reach into a prospective mining area of Saskatchewan, a province generally seen as a favourable mining jurisdiction. The company also stands to benefit from increased means to explore its own projects.
“With this transaction, Southern Empire will emerge as a company with NI 43-101 gold resources in Saskatchewan, annually ranked as one of the best mining jurisdictions in the world, which we will target to expand and enhance,” Southern Empire CEO Dale Wallster said.
“Together with our Oro Cruz and Eastgate gold projects in the southwestern U.S.A. we will be a multi-asset, advanced stage gold exploration and development company with holdings in some of the best mining jurisdictions in the world.”
Following the acquisition, both parties anticipate that the management team and board of directors for Southern Empire will remain unchanged, with the addition of a mutually agreed representative of the MAS Gold board of directors.
Southern Empire is a North American exploration company which currently owns two projects in the American southwest; the company has a 100% interest in the Oro Cruz property in southeast California, which sits just over 20km away from Equinox Gold’s Mesquite gold mine, and an 85% interest in the Eastgate gold project, an 817ha property in Nevada.