Bonterra Resources has proposed to acquire rival Canadian gold exploration and development firm Metanor Resources for C$78m ($58.93m) in an all-stock deal to expand its position in the Urban Barry Camp in Quebec, Canada.
The combined company of Bonterra and Metanor will gain control of three advanced high grade gold deposits in the form of Gladiator, Bachelor, Barry along with significant regional priority targets with resource upside potential.
According to Bonterra, the enlarged firm will also get 100% control of the only permitted gold mill in the Urban Barry Camp. The gold mill comes with an expandable centralized production facility and is surrounded by more than 15 known gold deposits located within a radius of 100km.
Bonterra expects the merger to help in de-risking its Gladiator project. The company said that Metanor’s mill infrastructure will give it the scope to significantly cut down the capital requirements and compress the timelines to push the Gladiator project towards potential production.
Bonterra president and CEO Nav Dhaliwal said: “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.”
As per the proposal, Bonterra will acquire all the shares of Metanor for C$0.73 ($0.55) in equity consideration. The exchange ratio of the deal will be 1.6039 Bonterra shares for each Metanor share.
Following the merger, existing Bonterra and Metanor shareholders will own about 58% and 42% stakes, respectively in the enlarged company.
Metanor chairman and interim CEO Greg Gibson said: “Putting together two, arguably, undervalued companies like Metanor and Bonterra is extremely beneficial and logical in a number of ways.
“Resource growth, exploration synergies and de-risking the path to production are all considerations, as well as potential to access different and larger markets and shareholders.”
Prior to the acquisition of Metanor, Bonterra plans to spin out its Larder Lake assets in Ontario along with a specified amount of cash. The company said that it is planning the move to create a well-capitalized and new exploration opportunity for its shareholders.