PERTH (miningweekly.com) – ASX-listed junior Mithril Resources has inked a non-binding term sheet with TSX-V-listed Newrange Gold Corp over a potential merger to create an Americas-focused exploration and development company.

If it proceeds, the proposed merger would be classified as a reverse takeover of Newrange Gold, under which Newrange would consolidate its share capital immediately prior to closing of the transaction on a 12-for-1 basis and issue 18.08 consolidated Newrange shares for every 1 000 Mithril shares held.

Newrange would also issue 18.08 warrants to acquire consolidated Newrange gold shares for every 1 000 options held by Mithril option holders, to be issued on the same terms as the relevant Mithril options being exchanged at completion.

The two companies are currently undertaking due diligence on each other’s assets and negotiating the terms of the proposed merger.

Mithril’s primary focus since 2020 has been the exploration and development of the Copalquin gold/silver district in Durango state, Mexico. The company currently holds a registered 50% interest in the project with an option to acquire the remaining 50% interest for $10-million in cash or shares at any time up to August 2026.

“This is an exciting development for the growth of Mithril’s principal asset with additional upside from Newrange Gold’s highly regarded management and its Red Lake district properties,” said Mithril CEO and MD John Skeet.

“The proposed merger will result in a new Americas- and precious metals-focused exploration and development company with a considerably experienced management team, enhanced market presence, a solid resource foundation, and significant growth potential.

Mithril’s 70 km² district-scale gold/silver property has demonstrated its excellent potential for resource expansion at the first of several target areas in the district plus prospectivity for additional discoveries.

“Newrange Gold’s existing North Birch and past-producing Argosy gold mine properties in the prolific Red Lake District of Ontario, Canada provide geographic diversity plus further discovery and resource development potential.”

Newrange is currently arranging a non-brokered private placement of up to C$360 000 and the company is arranging a private placement to raise up to C$3.6-million, which will close immediately after the consolidation. The placement will consist of up to 20-million units, at a price of 10c each, with each unit comprising one common share in the company and one-half share purchase warrant. Each whole warrant can be converted into an additional share at an exercise price of 27c each, over a 24-month period.

The net proceeds from the raise will be used to fund further exploration and development work at the Copalquin project, and to fund working capital.