TSX-V-listed junior Bonterra Resources and Metanor Resources have struck a merger agreement to create an advanced Canadian gold exploration and development company.
Under the terms of the agreement, Bonterra will acquire all of the issued and outstanding shares in Metanor for C$0.73 in equity consideration, at an exchange ratio of 1.6039 Bonterra shares, for each Metanor share.
Following the acquisition, Bonterra shareholders will hold some 58% of the combined company with Metanor shareholders holding the balance.
The combined entity will have one of the largest contiguous land packages located in the Urban Barry gold camp, in Quebec, and will control three high-grade gold deposits in the form of the Gladiator, Bachelor and Barry deposits, as well as significant regional priority targets with resource upside potential.
“Bonterra has been an extremely successful exploration company and must continue to evolve and participate in growth opportunities. We have quickly and efficiently discovered and developed the Gladiator deposit over the past two years, and now look to put our exploration skills and experience to work on the larger combined land package,” Bonterra president and CEO Nav Dhaliwal said on Monday.
“We believe we will be able to develop a much larger and more significant resource profile within the Urban Barry camp. The availability and ownership of a permitted and expandable processing facility certainly places Bonterra in an excellent position to rapidly and cost effectively become a significant Quebec-based gold producer."
Metanor interim CEO and chairperson Greg Gibson said that combining two, arguably undervalued, companies, was extremely beneficial and logical in a number of ways.
“Resource growth, exploration synergies and de-risking the path to production are all considerations, as well as potential to access different and larger markets and shareholders. I look forward to working with the Bonterra team, as the combined effort provides the opportunity to create significant shareholder value,” Gibson said.
Ahead of completing the Metanor acquisition, Bonterra will spin out its Larder Lake assets, in Ontario, to create a new exploration opportunity for its shareholders, with a market capitalisation of some C$7-million.