Canadian miner Borealis Mining Company has signed a definitive agreement to acquire all issued and outstanding shares of Gold Bull Resources, a US-based gold mining company.
The move will enhance Borealis’ ambition to become a mid-tier gold producer by adding high-margin ounces in Nevada, US, to its future gold production profile.
The Borealis mine and Gold Bull Resources’ Sandman gold projects in Nevada are synergistic as the Borealis ADR facility can process loaded carbon from the Sandman project, as outlined in the 2023 preliminary economic assessment (PEA), reducing capex and permitting risks.
Upon completion of the transaction, which is expected to close shortly after a special meeting of Gold Bull shareholders in late January or early February 2025, Borealis and Gold Bull shareholders will own approximately 86% and 14% of the combined entity, respectively.
Borealis shareholders gain an advanced Nevada gold project with a low capital expenditure and high internal rate of return, while Gold Bull shareholders receive a considerable premium on their shares.
Borealis CEO Kelly Malcolm said: “We have been very interested in Gold Bull and in particular the Sandman project for many months now. Our team has internally validated both the existing 2021 mineral resource and the economics presented in the 2023 PEA and have seen potential near-term upside opportunities in both. The Sandman project benefits from a great location close to Winnemucca, NV, strong historical and recent metallurgical results, a massive historical dataset and robust proximal infrastructure.
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“We look forward to rapidly advancing the project to production, especially in light of the sensitivity analysis of the 2023 PEA, which shows very exciting economics at current gold prices. Next steps will be validation of historical metallurgical results, which indicate non-refractory and readily recoverable gold mineralisation, initiation of a feasibility study, and concurrent permitting.”
“We hope to welcome existing Gold Bull shareholders to the Borealis journey, pending completion of the transaction, as we seek to grow into an established Nevada-focused gold producer.”
For Borealis shareholders, the acquisition adds 433,000 indicated and 60,800 inferred gold ounces at a cost of $14.6 per indicated ounce (oz).
Gold Bull shareholders are set to receive an acquisition price of approximately $0.6 per share, a premium over the 30-day and 90-day volume-weighted average prices (VWAPs).
The share exchange ratio stands at 0.93 Borealis Shares for each Gold Bull share, based on a 20-day VWAP.
This transaction provides Gold Bull shareholders with meaningful ownership in the combined entity, increased trading liquidity and a stronger capital markets presence.
The Sandman project, acquired from Newmont in December 2020, has an estimated 494,000oz of gold, with 433,000oz indicated and 61,000oz inferred.
The Borealis mine, fully permitted and operational, has historically produced more than 600,000oz of gold and offers high-grade expansion potential.
Gold Bull CEO Cherie Leeden said: “We reviewed and analysed numerous companies for potential mergers, and of those, Borealis stood out to us as the ideal partner. The Borealis board boasts extensive experience in planning, financing, building and operating mines. The merger allows our shareholders to maintain exposure to our Sandman and Big Balds Projects through a meaningful ownership stake in the combined company while gaining exposure to the Borealis Mine, which is a fully permitted and near-term producing gold asset, also located in Nevada.
“We are convinced that combining forces with Borealis will unlock significant value for all shareholders, as Borealis has committed to advance the Sandman Project through to feasibility study with the aim of getting Sandman into production as soon as possible. The intended outcome is to build the combined entity into a mid-tier gold producer.”
