Canadian explorer Trillium Gold Mines and Pacton Gold have undertaken a merger that will create a company that manages 15 projects, covering 1 260 km2 in the prolific Red Lake mining district of northern Ontario.
The companies state that their combined property holdings will be bigger than major gold producers in the district, such as Evolution Mining and Kinross Gold.
Pacton’s Red Lake gold project is located within 20 km of Trillium’s Newman Todd complex and the western portion of its Confederation Belt properties.
In addition, Trillium’s Leo and Pakwash properties are located immediately south of Pacton’s Dixie and Pakwash properties.
The transaction will also result in a greater combined market capitalisation and an expanded institutional investor base.
Shareholders are also expected to benefit from enhanced trading liquidity and a more robust treasury following completion of the transaction.
Trillium president, CEO and director Russell Starr says this combination “literally changes the map” of the Red Lake mining district. “With the addition of Pacton’s neighbouring projects, Trillium will become the leading strategic landholder in the region.”
Being the “most dominant and strategic” landholder in the jurisdiction for gold, he says the combined company will also seek to leverage the lithium and critical element opportunities that exist throughout the combined land package.
Pacton president, CEO and director Nav Dhaliwal says the combination of Trillium and Pacton represents “an all too rare outcome” in the sector of real synergy.
“Our projects are proximal, our corporate philosophies are consistent and cost efficiencies will be realised.
“The new company shall be properly diversified and well positioned to achieve exploration success, while putting under one roof an extensive land position that we expect will present strategic value to other players in the industry,” he says.
The combined company’s forward leadership and technical team represents more than 150 years of exploration and corporate development experience, with several senior geologists each having decades of exploration expertise in the Red Lake mining district.
The transaction will also add two experienced directors from Pacton to Trillium’s existing board, increasing board depth and providing continuity for Pacton shareholders.
Under the terms of the agreement, Trillium and Pacton will merge on an at-market basis, with each common shareholder of Pacton entitled to receive 1.27 common shares of Trillium in exchange for each Pacton common share held.
Upon completion of the transaction, existing Trillium and Pacton shareholders will own 53% and 47%, respectively, of the combined company.
The companies expect material cost savings and synergies from the consolidation of corporate overheads and exploration programmes across this prolific mineral district.