TSX-V-listed exploration and development company Southern Empire Resources on Monday announced that it would buy fellow-listed MAS Gold, which has two advanced stage gold deposits in the La Ronge gold belt of Saskatchewan, Canada.

The North Lake deposit contains 417 000 oz of gold and the Greywacke North deposit 95 600 oz.

"With this transaction, Southern Empire will emerge as a company having NI 43-101 gold resources in Saskatchewan, annually ranked as one of the best mining jurisdictions in the world, which we will target to expand and enhance.

“Together with our Oro Cruz and Eastgate gold projects in the south-western US, we will be a multi-asset, advanced stage gold exploration and development company with holdings in some of the best mining jurisdictions in the world. Southern Empire has a strong treasury, an award-winning technical team and management with strong track records in the capital markets,” said Southern Empire CEO Dale Wallster.

The combined entity would have a strong balance sheet, with no debt and a cash position of about C$5.5-million, which will be used to target expansion of the current NI 43-101 resources, as well as exploration and development on all of Southern Empire's projects.

Each shareholder of MAS Gold will receive one common share of Southern Empire for every 8.5 common shares of MAS Gold. Assuming completion, and none of the options or share purchase warrants of MAS Gold being exercised prior to closing of the transaction, Southern Empire will issue 5 828 090 Southern Empire shares to the shareholders of MAS Gold.

Based on a price of C$1.19 a Southern Empire share, the 8.5 to 1 conversion ratio represents an offer price of C$0.145 a MAS share, being a premium of 21% to the company’s closing price on July 10.

Following the completion of the transaction, Southern Empire will have 56 734 890 issued and outstanding shares, of which the former shareholders of MAS Gold will hold about 10.3%.