PERTH (miningweekly.com) – New York-listed Gold Resources Corporation (GRC) has made moves to acquire all of the issued and outstanding common shares of TSX-listed Aquila Resources under a plan of arrangement.

GRC in September announced plans to acquire all of the issued and outstanding shares in Aquila for 0.0399 of its own shares for each Aquila share held.

Based on GRC’s last trading price, the offer represented a 29% premium to the 20-day volume weighted average share price of Aquila’s shares, and valued Aquila shares at around 9c each.

At the close of the transaction, existing GRC and Aquila shareholders will own approximately 85.1% and 14.9%, respectively, of the combined company on a fully diluted basis.

The two companies have previously said that the takeover would result in Aquila’s flagship Back Forty gold project, in Michigan, being placed into production on a more accelerated basis, funded by cash flow generation, thus elevating the combined company to intermediate producer status.

"This transaction offers an attractive opportunity to the shareholders of Aquila and GRC to develop the Back Forty project using GRC's strong balance sheet and cash flows,” said CRG president and CEO Allen Palmiere.

“In addition, the combination of our complementary gold-rich assets will enhance both our mineral inventory and jurisdiction diversification. The announcement by Aquila yesterday, that it had closed the sale of its Bend and Reef exploration properties, was an important step in the process for signing the arrangement agreement. With this transaction, we look forward to becoming a new intermediate gold producer with a peer leading growth profile."

Aquila chairperson Barry Hildred said that the company strongly believed that the agreement with GRC provided significant benefits to Aquila shareholders.

“GRC has a strong balance sheet, it owns a consistently profitable mine in the Americas, and it has a highly accomplished technical and operating team. As such, this transaction materially de-risks the financing and development of the Back Forty project for the benefit of our stakeholders.”

The transaction, which has been unanimously approved by both boards of directors, would remain subject to a majority shareholder approval by Aquila shareholders, with a meeting scheduled for November 17.

The transaction is also subject to Superior Court approval and stock exchange approvals.