Canada-based Miata Metals has sealed a definitive agreement to acquire all issued and outstanding shares of compatriot 79North, which has gold assets in Suriname.
Under this all-share deal, Miata will issue nine million shares to 79North shareholders, with the exchange ratio determined by dividing these shares by the number of 79North common shares at closing.
Upon completion, 79North's stock options and warrants will be convertible into Miata shares using the exchange ratio.
Assuming no additional Miata shares are issued before closing, 79North shareholders will own nearly 21.2% of Miata's issued and outstanding shares.
The deal will be executed through a three-cornered amalgamation under Ontario's Business Corporations Act, involving Miata, 79North and a Miata subsidiary.
It needs the approval of 79North shareholders, with a special meeting expected in September 2024, where a 66 2/3% affirmative vote is necessary.
Miata has also provided a $200,000 secured bridge loan to 79North to cover transaction costs and settle liabilities before closing.
Additionally, Miata will issue one million shares as a finder's fee, subject to a four-month minimum resale restriction.
The closing of the transaction is contingent on 79North shareholder approval, stock exchange approval and other standard conditions.
Post-transaction, Miata's current executive team and board of directors will continue to manage the company.
The definitive deal follows a letter of intent signed between the two companies in June this year.
79North holds interests in the Sela Creek and Nassau gold projects in Suriname, both located along the Marowijne Greenstone Belt within the Guiana Shield, an area known for its significant gold deposits.
The acquisition of 79North is said to mark a “significant milestone” for Miata, widening its portfolio with two prospective gold properties in a region that is relatively underexplored but known for its gold endowment.
Miata CEO Dr Jacob Verbaas said: “The proposed transaction with 79North is a unique opportunity to provide Miata's shareholders exposure to an underexplored but highly-prolific jurisdiction in South America.
“We have been assessing opportunities in Suriname and have spent considerable time evaluating the region and are very excited by the exploration opportunities and potential of the 79North assets.
“We believe that we will be able to continue to build on the exploration success of the 79North team, and unlock significant shareholder value through the systematic exploration of Sela Creek and Nassau.”
