Canadian based mid-tier producer Gran Colombia Gold has bought 19.89% interest in Western Atlas Resources, which focuses on the acquisition and development of scalable precious metals projects.

The transaction was completed via the first tranche of Western Atlas’ non-brokered private placement.

The private placement’s first tranche included 22,255,883 flow through and non-flow through units, and Gran Colombia invested for 15,910,588 units for a total amount of C$1.35m.

In addition, Gran Colombia has purchased an aggregate of 15,910,588 common shares and 7,955,294 share purchase warrants of Western Atlas.

The common shares and share purchase warrants acquired through the closing of the private placement first tranche are for business and investment purposes.

The aggregate gross proceeds of private placement’s first tranche were C$1.9m ($1.4m), which will be used by Western Atlas for a drilling programme at its Meadowbank project and general and administrative purposes.

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It also intends to use the proceeds to seek restitution of the Increible Project by the current interim Government of Venezuela.

In relation to the completion of the first tranche, Gran Colombia vice-chairman Miguel de la Campa has been appointed to Western Atlas board.

Following the announcement of the acquisition, Gran Colombia’s stock price rose on the Toronto Stock Exchange from CAD$5.35 to CAD$5.46 a share, a 2% rise.

This has given the company a current market capitalisation value of CAD$271.76m and has continued Gran Colombia’s stock rise throughout 2019, having started the year on CAD$2.95 a share.

Gran Colombia Gold share price in 2019

Western Atlas Resources share price dipped slightly from CAD0.10¢ to CAD0.08¢, giving the company a market cap value of just under CAD$5m.

Furthermore, the two companies have signed a share purchase agreement with Medoro Resources International.

As part of the agreement, Gran Colombia will sell all of the outstanding shares of its indirect wholly-owned subsidiary Medoro to Western Atlas.

Medoro holds mining rights to the Lo Increible 4A and Lo Increible 4B concessions near the town of El Callao, Bolivar State, Venezuela.