Borealis Mining and Gold Bull Resources Join Forces for Growth

Borealis Mining and Gold Bull Resources Join Forces for Growth

In an exciting development for the mining sector, Borealis Mining Company Limited (TSXV: BOGO) is all set to strengthen its position in the gold market through the acquisition of Gold Bull Resources Corp. (TSXV: GBRC). This strategic move aims to bring substantial value to shareholders and expand production capabilities, particularly focusing on the high-potential Sandman gold project in Nevada.

Transaction Overview

On December 9, a definitive agreement was reached where Borealis will acquire all issued shares of Gold Bull. This transaction is designed to enhance Borealis' future gold production, capitalizing on the robust potential of Gold Bull's assets in Nevada.

Key Highlights of the Transaction

• Borealis is acquiring a highly advanced gold project in Nevada characterized by a low capital expenditure and strong internal rate of return (IRR), especially advantageous at current gold prices.
• The acquisition price presents a notable premium for Gold Bull shareholders, offering approximately CA$0.60 per share.
• The synergy between Borealis' existing mining operations and Gold Bull’s Sandman project stands to significantly reduce operational costs and permitting challenges.

Management Insights

Kelly Malcolm, CEO of Borealis, expressed enthusiasm regarding the acquisition, stating, "We have been closely watching Gold Bull and its Sandman project for several months. The project is ideally located with a wealth of historical data and strong infrastructure support. Our aim is to expedite its progress to production as we uncover the economic potentials highlighted in the most recent assessments."

Cherie Leeden, CEO of Gold Bull, highlighted the strategic advantages of the merger, saying, "Borealis represents a sound partner due to its experience and resources. This merger ensures that our shareholders retain exposure to our key projects while leveraging the operational strengths of Borealis' fully permitted mines. We believe this is a pivotal step to unlock greater value for all stakeholders involved."

Benefits to Borealis Shareholders

The integration of Gold Bull’s resources brings numerous advantages:

• Borealis will gain an advanced project with a competitive cost of US$14.6 per indicated ounce of gold, adding significant resources to its portfolio.
• The 2023 Sandman Preliminary Economic Assessment (PEA) suggests an efficient operation model with low initial costs and robust annual gold production estimates.
• A comprehensive internal review has revealed numerous exploration opportunities within the Sandman land package.

Benefits to Gold Bull Shareholders

Gold Bull shareholders stand to gain from the merger in several ways:

• The acquisition price reflects a substantial premium, enhancing shareholder value significantly.
• A meaningful stake in the newly formed entity will provide continued exposure to Gold Bull’s promising projects alongside Borealis’ operations.
• The potential for increased liquidity and better access to capital markets will bolster overall company value.

Transaction Specifications

The agreement entails that each Gold Bull share will be exchanged for 0.93 shares of Borealis, resulting in the issuance of approximately 13.8 million new shares. Following the transaction, current shareholders of both companies will hold approximately 86% and 14% in the combined entity, respectively.

To finalize this transaction, it is subject to a series of approvals, including a special shareholder meeting for Gold Bull to vote on the proposed arrangement. This includes a court-approved plan of arrangement under the relevant business regulations.

About the Sandman Project

The Sandman Project illustrates immense potential, with the 2023 PEA indicating a favorable mine life and robust economics. With an expected output of 38,000 ounces annually and a modest initial investment, Sandman could quickly become a cornerstone of Borealis' production capabilities.

Strategically located close to established infrastructure, the Sandman Project demonstrates an efficient production model poised to adapt to fluctuations in gold prices, with economic resiliency being a focal point of its operational design.

Looking Forward

The boards from both companies have unanimously approved the merger, marking a significant milestone in their operational strategies. This partnership not only aims to bolster their market presence but also enhances their capability to navigate the complexities of the gold mining industry effectively.

Frequently Asked Questions

What is the primary purpose of the Borealis and Gold Bull merger?

The merger aims to combine resources to enhance production capabilities and shareholder value, particularly leveraging the high-potential Sandman project.

How will shareholders benefit from this transaction?

Shareholders are expected to see immediate financial benefits through premium acquisition prices and increased ownership stakes in a stronger combined entity.

What are the next steps for Borealis after the acquisition?

Borealis plans to expedite the Sandman project towards production, beginning with validating historical results and initiating feasibility studies.

What influence does market fluctuation have on the Sandman project?

The Sandman project's economics are highly sensitive to gold prices, providing opportunities for robust performance in favorable market conditions.

How does Borealis plan to manage operational risks?

Borealis will leverage its existing infrastructure and past experiences to mitigate risks associated with permitting and operational costs, enhancing project viability.

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