logo-loader

Bonterra Resources to acquire Metanor Resources in C$78mln transaction

Published: 18:26 18 Jun 2018 EDT

Bonterra Resources to acquire Metanor Resources in C$78mln transaction
The transaction is valued at C$78-million on a fully diluted basis

Big news from Bonterra Resources Inc (CVE:BTR) today, as it announced plans to acquire emerging gold producer, Metanor Resources Ltd (CVE:MTO) in a transaction valued at C$78mln. 

Bonterra and Metanor entered into a binding letter of intent on June 17, 2018 and say the goal is to create an advanced Canadian gold exploration and development company focused on becoming a leader in the building out and future mining development of the Urban Barry gold camp in Quebec. 

"Bonterra has been an extremely successful exploration company and must continue to evolve and participate in growth opportunities. We have quickly and efficiently discovered and developed the Gladiator deposit over the past two years, and now look to put our exploration skills and experience to work on the larger combined land package," said Nav Dhaliwal, president and chief executive officer of Bonterra. 

"We believe we will be able to develop a much larger and more significant resource profile within the Urban Barry camp. The availability and ownership of a permitted and expandable processing facility certainly places Bonterra in an excellent position to rapidly and cost-effectively become a significant Quebec-based gold producer."

WATCH: 'Big year' expected for Bonterra Resources, with exploration well funded through 2018

Metanor Resources Inc. is an emerging gold producer its main assets, the Bachelor Mine and the Barry project, in addition to over 15,000 hectares of exploration property, located in the mining-friendly jurisdiction of Quebec in the heart of the Urban-Barry Camp.

Under the terms of the letter of intent, Bonterra will acquire all of the issued and outstanding common shares of Metanor for C$0.73 cents in equity consideration per share, at an exchange ratio of 1.6039 Bonterra shares for each Metanor share. This represents an aggregate transaction value of C$78-million on a fully diluted basis.

The purchase price represents a 40% premium to the volume weighted average price of Metanor's common shares on the TSX Venture Exchange on June 15, 2018, and a premium of 30% to the closing price as of such date.

Upon completion of the transaction, existing Bonterra and Metanor shareholders will own approximately 58% and 42% per cent of the pro forma company, respectively.

Bonterra to create spinout

"Putting together two, arguably undervalued, companies like Metanor and Bonterra is extremely beneficial and logical in a number of ways," said Greg Gibson, chairman and interim chief executive officer of Metanor.

"Resource growth, exploration synergies and derisking the path to production are all considerations, as well as potential to access different and larger markets and shareholders. I look forward to working with the Bonterra team, as the combined effort provides the opportunity to create significant shareholder value."

Immediately prior to the completion of the proposed transaction, Bonterra will complete the spinout of its Larder Lake project in Ontario to current shareholders of Bonterra in order to create a new exploration company called Spinco, which is focused on the growth of this multi-deposit, high-grade project. 

The transaction is expected to be completed in the third quarter of 2018 and is subject to shareholder approval. 

ARway.ai announces multiple new SaaS developer contracts in both the United...

ARway.ai (CSE:ARWY, OTCQB:ARWYF) Chief Executive Officer Evan Gappelberg joined Steve Darling from Proactive to announce multiple new SaaS developer sign-ups for its augmented reality experience platform, focusing on AR indoor navigation. These partnerships represent significant milestones in...

2 hours, 11 minutes ago