Gatling Exploration aims to advance the Larder Gold Project, which is located in the prolific Abitibi greenstone belt in Northern Ontario

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MAG Silver agrees to acquire Canada-based Gatling Exploration. (Credit: PublicDomainPictures from Pixabay)

Canadian development and exploration firm MAG Silver has agreed to acquire Gatling Exploration, a Canadian gold exploration company, in an all-share transaction.

Under the terms of the agreement, MAG Silver will purchase the entire issued and outstanding common shares of Gatling.

Each shareholder of Gatling will be eligible to receive 0.01702627 of a common share of MAG Silver for each share of Gatling held.

MAG Silver said the consideration values Gatling at about C$0.40 per share, representing a premium of nearly 47.4% to Gatling shareholders based on the five-day volume-weighted average price (VWAP) of each company as of the close of 10 March 2022.

Once the deal is closed, the shareholders of Gatling will hold about 0.79% of MAG shares on an outstanding basis.

Gatling aims to advance the Larder Gold Project, which is located in the prolific Abitibi greenstone belt in Northern Ontario.

Located 35km east of Kirkland Lake, the Larder project hosts three high-grade gold deposits along the Cadillac-Larder Lake Break.

It is 100% owned by Gatling and includes patented and unpatented claims, leases and mining licenses of occupation within the McVittie and McGarry Townships.

The project, covering an area of 3,370ha, lies 7km west of the Kerr Addison Mine.

MAG Silver president and CEO George Paspalas said: “Gatling’s Larder property gives us a substantial toe hold along this regionally productive gold-bearing structure where we believe more gold should be findable.

“We are very impressed with the geological abilities of the Gatling field team and look forward to applying some new takes on where mineralization occurs in Abitibi orogenic gold systems.”

The deal has been approved by the board of directors of both MAG and Gatlin.

The transaction is expected to complete by late May 2022, subject to the receipt of applicable regulatory approvals and the satisfaction of certain other closing conditions.