Canadian precious metals mining company Aya Gold & Silver has signed a binding agreement to acquire mineral exploration company Algold Resources.

Aya Gold & Silver will fund Algold’s proposal to its creditors and would become Algold’s sole shareholder at the closing of the deal.

Under the investment agreement, Algold will receive C$100,000 ($79,233) in cash from Aya and C$2.5m ($1.98m) in Aya shares to fund its proposal.

Additionally, Aya will provide C$2.4m ($1.9m) in Aya shares, which will be distributed to Algold’s current shareholders.

Last month, Aya acquired Algold’s approximately C$10m ($7.92m) secured debt to become the sole secured creditor of the company.

In a press statement, Aya Gold & Silver said: “Since then, Aya has made several secured advances and payments in the context of Algold’s restructuring that are expected to total approximately C$2.9m at the time of closing of the transaction.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Aya expects the deal to provide a fully permitted, near-term gold asset, Tijirit Project, located in northwestern Mauritania.

The project would be added to Aya’s non-silver portfolio that includes Boumadine, Azegour and Amizmiz.

Aya Gold & Silver president and CEO Benoit La Salle said: “This transaction allows Aya to opportunistically acquire a near-term precious metals asset to add to our non-silver portfolio of assets at an attractive cost.

“We believe this is a rare opportunity to leverage our understanding of the Tijirit Project to unlock value for all shareholders through the development of the Tijirit Project as well as a right-sized exploration program in a proven gold district.”

Aya plans to invest $5.9m in the Tijirit project this year. This includes $3.5m for drilling and geology, as well as $1.5m for engineering and fieldwork.