Ascot Resources Ltd. agreed to acquire IDM Mining Ltd. in a deal that will consolidate the companies' gold projects in the Golden Triangle region of northwestern British Columbia; closing is expected by the end of March.
Ascot and IDM Mining own the Premier and Red Mountain gold projects, respectively, hosted within separate mineralized trends in the Golden Triangle area.
Under the definitive agreement, each IDM Mining shareholder will receive 0.0675 of an Ascot share for each share held, with IDM Mining shareholders expected to own approximately 16.7% of the merged company upon completion, according to a Jan. 7 release.
The consideration values IDM Mining at approximately 8.6 Canadian cents per share, representing a premium of approximately 54% to IDM Mining shareholders based on the companies' 20-day volume weighted average price as of trading close Jan. 4.
Ascot, which will also grant IDM Mining a C$3.4 million secured convertible bridge loan to improve liquidity until closing, secured a term sheet with Sprott Resource Lending for a US$10 million convertible note. The two-year note has an interest rate of 8% to 8.5% and is convertible at C$1.50 per share.
The companies noted that the proposed deal received unanimous approval from both boards and support from IDM Mining's largest shareholder, Osisko Gold Royalties Ltd.
According to a December 2018 resource estimate, the deposits at Premier host indicated resources containing 667,000 ounces of gold and 2.3 million ounces of silver, or 682,000 ounces of gold equivalent, within 2.8 million tonnes grading 7.46 g/t of gold and 26.2 g/t silver.
Red Mountain hosts measured and indicated resources containing 704,600 ounces of gold within 2.8 million tonnes grading 7.91 g/t gold and 22.75 g/t silver as of June 2018.