MegumaGold Corp (CSE:NSAU) said Tuesday that it is in talks to acquire Nova Scotia-focused Osprey Gold Development Ltd (CVE:OS) in a deal which will create a leading precious metal explorer in the Canadian province.
In an update on its ongoing corporate and exploration activities, MegumaGold said it is continuing discussions with Osprey Gold about acquiring 100% of all its issued and outstanding shares. The all paper business combination would see Osprey shareholders receive MegumaGold stock equal to an at an exchange ratio of one Meguma share for every two Osprey shares owned.
“The company and Osprey Gold remain committed to consummating the proposed transaction and the parties are currently in the process of finalizing the terms of a definitive agreement,” MegumaGold said in a statement.
Osprey is focused mainly on advancing the Goldenville project, which lies in Nova Scotia’s largest historic gold district, and is also exploring four other gold projects within the Meguma Supergroup including the Caribou project. MegumaGold currently holds 7,176 hectares of exploration licences, which are adjacent to Osprey’s Goldenville project.
Meanwhile, the Canadian junior gold explorer also told investors it is advancing targeting and permitting work in preparation for core drilling activities on its Touquoy West property.
MegumaGold said it was "very pleased" with the ground geophysics work at its Touquoy West property in Nova Scotia, where some of the results had indicated the presence of disseminated sulphide mineralization similar in style to the adjacent Touquoy gold mine deposit, a few kilometres to the east.
The company said that extensive ground geophysics and soil survey programs completed in 2019, combined with a recent IP survey define three large anomalies on the western extension of the Moose River anticlinal structure, which hosts St Barbara’s operating Touquoy mine. Given the promising surveys, the company said a core drilling program will start at Touquoy West as soon as permits are granted, and the coronavirus pandemic subsides.
In December, the company struck an option agreement with Genius Metals Inc (CSE:GENI) to acquire up to a 100% interest in six mineral exploration licences totalling 100 claims on 1,620 hectares directly adjoining the company’s Touquoy West licences to the east and St Barbara Ltd’s licenses to the west.
MegumaGold said it is now designing “a detailed ground survey program” on the exploration licences optioned from Genius Metals that sit contiguous to the western extension of MegumaGold’s Touquoy West property.
Elsewhere, the company has also completed detailed geological modeling and a bedrock gold distribution study for its Killag project in Nova Scotia. “Drill program planning and permitting activities are currently underway,” said MegumaGold.
Additionally, the company said it has “expanded its mineral claims footprint in Nova Scotia” through the acquisition of “21 exploration licences” comprised of 477 mineral claims spread over 7,727 hectares that are contiguous with several exploration licences already held by the company in the Meguma Terrane. These additional mineral claims were acquired from a vendor at a cost nearly equal to mineral licence fees paid to the government of Nova Scotia. A 2% gross royalty was granted on the claims in connection with the purchase.
Contact the author Uttara Choudhury at [email protected]
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