NexGold Mining (TSX-V:NEXG) and Signal Gold (TSX:SGNL) have entered into a definitive agreement to merge, creating a near-term gold developer advancing projects throughout Canada.
The transaction combines near-term development projects including NexGold’s Goliath Gold Complex Project in Northern Ontario and Signal’s Goldboro Gold Project in the Goldboro Gold District in Nova Scotia.
Fiore Management & Advisory Corp is acting as advisor to NexGold and DuMoulin Black is acting as its legal counsel in connection with the transaction. BMO Capital Markets are financial advisors to Signal, while Cassels Brock & Blackwell LLP is acting as its legal counsel.
The combined entities will emerge with 4.7 million gold ounces of measured and indicated mineral resources and 1.3 million gold ounces inferred with significant growth potential across a combined property package of more than 60,000 hectares (600km2).
The combined company will focus on growth in the Goldboro and Goliath districts through drilling while assessing further opportunities for corporate growth.
In connection with the transaction, Signal and NexGold will also conduct a concurrent non-brokered private placement to raise C$11.5 million ($12.38 million).
It is proposed that Signal’s outstanding credit facility of some US$20.4 million with Nebari and NexGold’s US$6 million facility with Extract Capital will be repaid.
NexGold is working to arrange a new US$12 million secured credit facility with Nebari over a term of 30 months and the issuance of US$4 million of NexGold shares, with a one-year right to place. The arrangement would also grant a 0.6% NSR on the Goldboro Project to Nebari for US$6 million with a 100% buy-back right at the company’s option for the first 30 months.
NexGold President Morgan Lekstrom says it will be a transformative transaction that combines two near-term buildable projects in Canada on a potential path to a production profile of over 200,000 ounces per year.
“This reflects the execution of NexGold’s strategy of targeting high-value gold projects with potential production of over 100,000 ounces and a capital expenditure of under $400 million,” Lekstrom says.
Signal CEO Kevin Bullock believes the transaction brings together two cornerstone Canadian gold projects and presents an “exciting opportunity to create a leading gold development company in Canada during a time of increasing gold prices”.
Write to Adam Orlando at Mining.com.au
Images: NexGold & Signal
