The company currently has a stake of nearly 9.7% in the Canadian precious and base metals exploration company
Troilus Gold has agreed to take full ownership of UrbanGold Minerals by acquiring the remaining stake of around 90.3% in the latter in an all-stock deal worth CAD19m ($15.1m).
UrbanGold Minerals is a precious and base metals exploration company. Its operations are focused in prospective regions of Quebec.
Troilus, on the other hand, is a Toronto-based advanced stage exploration and early-development company. The company is engaged in the mineral expansion and proposed mine re-start of the previously operating Troilus gold and copper mine in Quebec.
Through the deal, Troilus Gold will add UrbanGold Minerals’ 35,100ha land package near its existing 107,300ha property within the Frôtet-Evans Greenstone Belt.
Furthermore, the company will boost its exploration and growth profile by adding UrbanGold Minerals’ underexplored asset portfolio, which includes the BullsEye project.
Troilus Gold CEO Justin Reid said: “The acquisition of Urban Gold aligns with Troilus’ focus on developing a near-term production asset while executing a growth strategy supported by a broad portfolio of exploration and early-development assets within the Frôtet Evans Belt and Quebec.
“We look forward to welcoming Urban’s shareholders to Troilus and our continued success together.”
As per the terms of the deal, shareholders of UrbanGold Minerals will exchange each of their shares held in the company for 0.3004 shares of Troilus Gold. The exchange ratio values each of the UrbanGold Minerals’ shares at CAD0.30 ($0.24).
The management and board of UrbanGold Minerals, which have a combined stake of 6.59% in the company have agreed to vote in favour of the transaction.
UrbanGold Minerals interim president and CEO Jens Hansen said: “We’re incredibly pleased to be working with Troilus Gold in further developing the Troilus area properties and our other Quebec assets.
“This amalgamation will benefit UrbanGold shareholders by giving exposure to a nearby advanced gold-copper permitted deposit, with an established infrastructure, and will allow for fast tracking of exploration work on UrbanGold’s property, with substantial cost savings.”
Closing of the deal, which is subject to UrbanGold Minerals’ shareholders’ approval, is expected to occur by the end of May 2021.