Titan Minerals has signed a binding agreement to acquire all of the issued and outstanding common shares of Core Gold for C$72m ($54.7m).
The merger of the two companies will create a diversified gold company, which will focus on Latin America and have a portfolio of exploration, development and production assets in the emerging mining jurisdictions of Ecuador and Peru.
As part of the merger, Titan expects to issue around 319,505,438 Titan Shares, assuming a 10:1 share consolidation of Titan shares, and 83,772,324 options.
After the merger concludes, shareholders of Core Gold and Titan will each hold around 48.5% and 38.9% of the combined company, respectively.
Titan Minerals executive chairman Matthew Carr said: “The combination of Titan and Core Gold has compelling strategic logic and merit, which was unanimously recognised by the Board of Directors of both companies.
“The combined organisation will be an emerging Ecuador and Peru focused gold company with an outstanding portfolio of gold assets.”
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On completion of the merger, the combined company will have around C$25m ($19m) in cash before costs of the merger.
Furthermore, the merger diversifies Titan’s asset base into emerging Ecuador’s mining jurisdiction.
At present, Core Gold is operating the Dynasty Goldfield project and processing all material at the Portovelo mill and processing plant.
Dynasty Goldfield, which is currently operating as a small-scale open pit mining operation, comprises three mining concessions at altitudes ranging from 1,100 to 1,800m above sea level and covers an area of about 6,700ha.
Core Gold lead director Gregg Sedun said: “The merger with Titan allows Core Gold shareholders to unlock value from Core Gold’s underexplored exploration and development assets.”