TORONTO (miningweekly.com) – TSX-V-listed explorers and project developers Probe Metals and Adventure Gold have announced that they plan to merge to create a new gold explorer and developer with properties in some of the most prolific greenstone belts in Quebec and Ontario.
The combined company would aim to continue to unlock value at Adventure’s Val-d’Or East project, which currently contained a compliant inferred resource of 770 000 oz at 2.6 g/t gold, calculated at a 1 g/t cutoff above 350 m depth and 1.5 g/t cutoff below. The company would also aim to unlock value from its portfolio of 19 other projects within some of the most high-profile gold camps in Canada, including West Timmins, Val-d’Or, Casa Berardi and Detour Quebec.
“Probe has spent more than a year reviewing over 400 projects and we are excited to have identified an opportunity that we believe has the potential to add significant value to all shareholders of the merged company. The combination of Adventure’s prospective project portfolio, Probe’s strong balance sheet and the combined company’s technical and corporate experience will allow us to deliver value through focused and cost-effective exploration in two of the friendliest, safest and most productive mining jurisdictions in the world,” Probe president and CEO David Palmer stated in a press release Thursday.
Under the terms of the transaction, Adventure shareholders will receive 0.39 of a Probe share for each Adventure share held. The exchange ratio was C$0.285 per Adventure common share, based on Probe's Wednesday closing price; this implied a total equity value of about C$22.8-million.
The exchange ratio represented a 36% premium on Adventure’s closing price, as at April 6, 2016, and a 23% premium to both companies’ 20-day volume weighted average prices. Probe currently had 34.91-million common shares issued and outstanding. Upon completion of the transaction, Probe would have about 66.19-million shares issued and outstanding, and existing Probe and Adventure shareholders would own about 53% and 47% of the combined company, respectively.
As part of the Transaction, Probe also arranged a non-brokered private placement with Goldcorp for proceeds of about C$2.9-million. Goldcorp had agreed to subscribe for 4.4-million Probe shares, representing about 12.6% of the current issued and outstanding Probe stock. Goldcorp’s acquisition of the Probe shares was conditional on the closing of Adventure's acquisition.
Goldcorp currently owned 6.17-million Probe shares, or about 17.7% of the current issued and outstanding Probe shares and, combined with the right to acquire 4.4-million more shares, would result in ownership of about 10.57-million shares, representing about 30.3% of the current issued and outstanding Probe stock. After completion of the private placement and the Adventure transaction, Goldcorp would own about 15% of the issued and outstanding Probe shares.