MAG Silver (TSX: MAG; NYSE-A: MAG) is buying Canadian junior Gatling Exploration (TSXV: GTR) in an all-share deal.
Gatling shareholders would obtain 0.017 of a MAG frequent share for every Gatling share held, valuing Gatling at roughly $0.40 per share. The share consideration displays a 49.1% premium relative to the corporate’s closing value on the TSX Enterprise Alternate on March 10 and a 47.4% premium relative to the corporate’s five-day quantity weighted common buying and selling value.
As well as, MAG has agreed to offer Gatling with a bridge mortgage of as much as $3 million to finance the corporate’s accounts payable and working bills. The mortgage is convertible into 19.9% of Gatling’s issued and excellent shares.
Shares in Gatling shot up 37% to $0.37 per share following the information, giving the Ontario-focused gold explorer a market capitalization of $16.8 million. Over the past 12 months Gatling has traded in a spread of $0.20 and $0.52 per share.
Gatling’s prized asset is the Larder gold undertaking 35 km east of Kirkland Lake within the Abitibi greenstone belt of northern Ontario. The property hosts three high-grade gold deposits alongside the Cadillac-Larder Lake Break. The three deposits have a mixed in-pit and underground useful resource of 5.13 million indicated tonnes grading 2.39 grams gold per tonne for 388,000 oz. of contained gold and 6.89 million inferred tonnes grading 4.21 grams gold per tonne for 933,000 ounces.
The three,370 hectare Larder undertaking space is about 7 km west of the Kerr Addison mine, which produced 11 million ounces of gold.
“Gatling’s Larder property offers us a considerable toe maintain alongside this regionally productive gold-bearing construction the place we consider extra gold must be findable,” George Paspalas, MAG Silver’s president and CEO, commented in a information launch.
MAG is primarily centered on silver-gold tasks within the Americas. Its undertaking portfolio is anchored by the Juanicipio silver undertaking (44% owned) in Mexico, being developed with Fresnillo Plc (56%), the operator.
“In our view, this looks like a small, low-risk transaction for MAG given it represents <1% fairness dilution,” Ryan Thompson of BMO Capital Markets commented in a analysis word to shoppers. “Upon closing of the Gatling deal, MAG can have a second exploration-stage property (Deer Path being the opposite) in a beneficial mining jurisdiction.”