Canadian miner ValOre Metals has entered an arm’s length binding letter agreement to acquire all issued and outstanding common shares of South Atlantic Gold.

The deal will combine their respective Brazilian projects, both called Pedra Branca, and support their development.

The transaction, valued at approximately C$2.7m ($1.9m) based on ValOre's share price as of 14 February 2025, will be executed through the issuance of 38.5 million ValOre common shares.

The agreement was unanimously approved by the boards of both companies and is expected to be completed via a court-approved plan of arrangement.

A shareholder meeting for South Atlantic's shareholders to vote on the deal is anticipated to take place in the second quarter (Q2) of 2025.

South Atlantic president and CEO Douglas Meirelles said: “We believe the combination of our respective projects will unlock significant value for all shareholders, in addition to having a positive impact on the surrounding communities.

“As part of Discovery Group, ValOre is uniquely positioned with both access to capital and an experienced team to advance this nearly 100,000ha project. I would like to thank the shareholders, board of directors, and executives who were part of this journey in South Atlantic Gold, and look forward to seeing continued progress at Pedra Branca. We encourage our shareholders to approve this transaction so that together we can advance this highly prospective precious metals district.”

Key South Atlantic shareholders, along with its officers and directors, are expected to sign voting support agreements in favour of the transaction upon the execution of a definitive agreement.

The completion of the deal is subject to several conditions, including court and regulatory approvals, with the TSXV's approval being one of the critical regulatory clearances.

If all conditions are met, the transaction is slated for completion in Q2 2025.

After the deal's closure, South Atlantic Gold's shares will be delisted from public markets, and the company will no longer be a reporting issuer under Canadian securities laws.

ValOre chairman and CEO Jim Paterson said: “Bringing together these two parallel and adjacent projects is long overdue, as they share so much related to geology, infrastructure, communities, government stakeholders, project access, amenities and services.

“In addition, ValOre’s highly trained local exploration team has undertaken a detailed review of the SAO licence package and has identified high-priority targets in known mineralised zones along this 50km-long gold belt located, literally, across the highway from our Pedra Branca palladium/platinum project.”