Canada-based miner Copper Standard Resources has agreed to acquire all of compatriot Pucara Gold’s outstanding common shares.
Both these miners are focused on Peru. Their merger will combine a prospective copper exploration portfolio covering more than 17,000ha in Peru.
The deal will be executed through a court-approved plan of arrangement, with each Pucara shareholder receiving 0.1 Copper Standard shares for every share they hold.
This swap ratio suggests a valuation of $0.05 per Pucara Share, representing a premium of around 67% over the closing prices of Copper Standard and Pucara as of 10 September 2024.
Additionally, it reflects a premium of around 50% when considering the 20-day volume-weighted average prices of Copper Standard and Pucara shares as of the same date.
Upon deal completion, current shareholders of Copper Standard will own around 85% of the merged entity, while Pucara shareholders will hold approximately 15% on an undiluted basis.
The deal is expected to generate synergies and cost savings while also offering greater scale and improved diversification for the combined business.
It would incorporate three copper exploration assets in Peru, including two that were chosen by the late David Lowell, renowned by many as one of the world's greatest explorers.
The three projects are Pacaska, Paco Orco and Capricho.
Pacaska features an epithermal high-sulphidation gold/porphyry copper target located on 7,650ha of land, characterised by a broad mineralised footprint.
The other two projects are Paco Orco, which covers a 4,400ha claim block, and Capricho, which encompasses a 3,768ha concession package.
The Paco Orco project is a carbonate replacement-type target with rock samples showing grades of 0.58% lead, 0.26% zinc and 58 grams per tonne of silver.
Meanwhile, the Capricho project is a porphyry copper target with enrichment zones reaching up to 3% copper. A third party holds the option to earn a 75% interest in both projects.
Copper Standard CEO Matt Fargey said: “This transaction is an exciting opportunity to unite complementary assets, teams and investors to create value for all Copper Standard and Pucara shareholders.
“The late David Lowell endorsed each of Copper Standard and Pucara's copper exploration projects and now combining them all together will allow Copper Standard to leverage its Peruvian team to advance the exploration efforts in-country.”
