Manitoba gold-mine operator San Gold Corp. has entered into a definitive agreement to merge its operations with Toronto-based Kerr Mines Inc.
Kerr Mines’ chairman Stephen McIntyre said in a statement that merging San Gold’s Rice Lake gold mine operation near Bissett with Kerr Mines’ Copperstone Mine in Arizona is an important step in creating the next North American mid-tier gold producer.
"Once this transaction has been completed, the combined entity will have a much stronger market presence that either company could have achieved on its own," McIntyre said.
San Gold president Gestur Kristjansson said he also is very pleased with the deal the two companies have structured.
"We’ve fixed a lot of the problems over the past few months at Rice Lake," Kristjansson said. "We’re looking forward to continuing improvements as well as leveraging the entire team at the Copperstone opportunity and at other projects."
Under the terms of the deal, each Kerr Mines shareholder will be entitled to an exchange ratio of three common shares of San Gold for each common share of Kerr Mines. San Gold’s 373 million outstanding shares were valued at 12.5 cents at the close of the markets on Monday, while Kerr Mines’ 95 million outstanding shares were valued at 34.5 cents.
The deal is still subject to approval by the shareholders of the two companies and the Toronto Stock Exchange.
San Gold is holding its annual shareholders’ meeting today in Winnipeg.