IDM Mining and Ascot Resources have entered into a definitive arrangement agreement that will result in Ascot acquiring all of the issued and outstanding common shares of IDM.
Each IDM shareholder will be entitled to receive 0.0675 of a common share in Ascot for each share in IDM held.
The consideration values IDM at about C$0.086 apiece, representing a premium of about 54% to IDM shareholders based on the trailing 20-day volume weighted average price of each company as at the close of trading on January 4.
Upon completion of the transaction, it is expected that IDM shareholders will hold about 16.7% of Ascot shares on an outstanding basis.
The transaction will consolidate Ascot’s Premier gold project and IDM’s Red Mountain project.
The combined entity is expected to benefit from numerous operational and development synergies.
The combination of the two companies will result in a resource base of high-grade measured and indicated gold/silver resources positioning Ascot as a consolidator of the southern Golden Triangle, in British Columbia.
“At this time in the gold sector, scale is important and, together with the Red Mountain project, the larger company will hopefully become a prominent gold developer in terms of both grade and tonnage,” Ascot president and CEO Derek White commented in a statement issued on Monday.
“In addition to long-term value for both shareholders of Ascot and IDM, this combination provides a critical mass and optionality for development of multiple high-grade gold deposits which will result in significant stakeholder benefits for citizens of the Nisga’a Nation, for my hometown of Stewart and for my friends in the border town of Hyder,” said IDM president and CEO Robert McLeod.
The combined company will control two geological trends hosting considerable exploration ground in the Golden Triangle, which remains highly prospective for additional gold/silver discoveries, he added.
Ascot’s deposits and IDM’s Red Mountain project are located within separate mineralised trends and have separate National Instrument 43-101-compliant mineral resource estimates.
The proposed pro forma resource base would include 5.55-million tonnes of measured and indicated resources, averaging 7.68 g/t gold, totalling 1.37-million ounces of gold, with additional inferred resources of 6.35-million tonnes averaging 7.12 g/t gold totalling 1.45-million ounces of gold.