Gold’s record highs have spurred a takeover play for privately owned NV King Goldlands from Toronto-based uranium explorer Radio Fuels (CSE:CAKE).
Radio Fuels will acquire all of the shares in NV King, which is not currently listed on any exchange, in exchange for Radio Fuels shares, which are trading around C$0.135.
NV King shareholders will own 40% of the issued and outstanding Radio Fuels shares on completion of the tie-up.
Gold hit an all-time high in mid-August, when it punched through US$2,500 ($3,686) an ounce. It is still setting above that level, fetching around US$2,519 an ounce.
Radio Fuels CEO Phil O’Neill says the transaction represents a significant opportunity to expand on the company’s existing assets while also providing value to the existing shareholders of NV King.
“With gold breaking out to all-time highs, we are excited to announce this agreement with NV King Goldlands,” he says.
“The NV King team has spent nearly a decade assembling a world-class portfolio of advanced exploration assets located along the prolific Battle Mountain/Cortez Trend.”
Radio Fuels, which has a market capitalisation of C$18.7 million ($20.5 million), says the addition of the NV King property portfolio will make the company the “largest junior gold explorer in Nevada when measured by mineral tenure”.
The NV King property portfolio currently ranks as the third largest in Nevada behind Nevada Gold Mines (Barrick/Newmont JV) and Kinross Gold (TSX:K).
Radio Fuels will gain exposure to the Atlanta Gold Mine Project, currently being advanced by Nevada King Gold (TSX-V:NKG), via the 3% net smelter royalty held by NV King.
The board of both companies have unanimously approved the definitive arrangement agreement.
The deal is still subject to the approval of the plan of arrangement by the shareholders of NV King, as well as approval from the British Columbia Supreme Court and Canadian Securities Exchange.
Radio Fuels’ flagship project is the 100%-owned Eco Ridge Project located in Elliot Lake, where more than 300 million pounds of uranium oxide were mined from conglomerate beds by Rio Algom and Denison Mines from 1956 to 1996.
The Eco Ridge Project hosts indicated and inferred resources of 107.1 million uranium equivalent pounds. The project also comprises rare earths.
Radio Fuels had been planning to spin out its Elliot Lake uranium property, but says it will not go ahead with the demerger.
The company expects the takeover of NV King to close in the final quarter of 2024.
Write to Angela East at Mining.com.au
Images: Nevada King Gold
