Australia-based Atlantic Gold has entered into an agreement to merge with natural resource company, Spur Ventures, which is headquartered in Vancouver, Canada.
Under the terms of the agreement, Spur Ventures will acquire all shares of Atlantic for $30.2m by way of a scheme of arrangement.
Under the scheme, each shareholder with fully paid ordinary shares in Atlantic will receive 0.05564 of a common share in Spur and 0.02782 of a share purchase warrant in Spur, for each fully paid Atlantic share held.
Each share purchase warrant will be exercisable for a period of four years from the date of closing, at an exercise price of C$0.60.
The merger will pave the way to fund the development of Atlantic’s Touquoy Gold project in Nova Scotia, Canada.
Atlantic is also raising up to $1m through a share purchase plan to fund its working capital requirements leading to the merger.
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.
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 formBy GlobalData
Atlantic Gold chairman Ronald Hawkes said: "The merger presents Atlantic shareholders with a most important first step towards the funding of the development of the Touquoy Gold project."
Spur will use its C$28.7m in cash to further develop the estimated 1.2 million ounces of gold at Touquoy and the Cochrane Hill prospect in Nova Scotia.
Spur’s major shareholder is Sprott Asset Management, which holds 19.4% of the Spur shares on issue.