Moneta Gold has reached an agreement to acquire Nighthawk Gold in an all-stock deal, resulting in the formation of a "leading" gold development company in Canada.
As per the agreed terms, Nighthawk shareholders will secure 0.42 Moneta shares for each share held.
Moneta shareholders will own 66% of the combined business, emanating from the at-market merger, while Nighthawk shareholders will hold the remaining 34% interest.
The combined company will be supported by 7.8 million gold ounces (oz) in indicated mineral resources and ten million gold ounces in the inferred category.
Its portfolio will include two cornerstone, large-scale gold projects in Canada, including the Tower and Colomac projects.
The Tower gold project is reputed to have an average production profile of 261,000oz per year over the first 11 years.
It is estimated to have C$1.1bn in net present value (NPV) post-tax at a 5% discount and an after-tax internal rate of return (IRR) of 32%.
The Colomac gold project has a potential production profile of 290,000oz per year over its 11.2-year mine life. It has C$1.2bn of NPV at 5% and an IRR of 35%.
The two companies further stated that their combination can help unlock general and administrative (G&A) and operational efficiencies.
This can bring workflow sequencing and phased development of the projects.
The management is also planning to leverage cross-project experiences to team up on studies, permitting and project de-risking.
Nighthawk also signed an agreement with SCP Resource Finance, on behalf of a syndicate of underwriters. As per this agreement, the underwriters agreed to buy 36.7 million subscription receipts of Nighthawk, each priced at C$0.34, on a bought-deal basis.
As a result, the combined company will receive an aggregate amount of C$12.5m.
This amount will be used for funding the exploration and advancement of the Tower and Colomac gold projects and for working capital and general corporate purposes.
Nighthawk president, CEO and director Keyvan Salehi and Moneta interim CEO and chairman Josef Vejvoda said in a joint statement: “We believe that the transaction presents an exciting opportunity to create a leading gold development company by bringing together two cornerstone assets in Canada.
“The combined company will benefit from a strong balance sheet, led by a skilled leadership team, and a high-quality portfolio anchored by two robust, large-scale assets in established and emerging mining camps.”
This deal is due to be completed in the first quarter of 2024, subject to shareholder and regulatory approvals, and the concurrent financing is scheduled to be completed on or about 19 December 2023.
The merged entity’s board will include seven directors, including four nominees from Moneta and three from Nighthawk.
