PERTH (miningweekly.com) - ASX-listed junior International Goldfields has entered into a conditional heads of agreement with US-based Sante Fe Gold to merge, creating a significant gold and silver company.
The combined entity would have a market capitalisation of some A$70-million and cash reserves of at least A$10-million, with gold and silver production of some 28 000 oz/y of gold equivalent, an operating mill, near-term development assets and a portfolio of advanced exploration assets.
The merged group’s assets would include the Summit gold/silver mine, the Ortiz gold project and the Mogollon gold/silver project, all in New Mexico, as well as the Latin gold project, in Brazil.
“The combination of International Goldfields’ exploration assets in emerging global mining districts with Santa Fe’s portfolio of low-cost mining and exploration assets in New Mexico, together with the combined skills of the two experienced management teams, will create a new merged company capable of adding significant value for its shareholders during a time of robust gold price,” said International Goldfields CEO Travis Schwertfeger .
Santa Fe CEO Pierce Carson added that the company’s project had significant exploration and development potential, and noted that it had achieved commercial production at its Summit mine in early 2012.
“Our focus is on increasing production at Summit and bringing the Mogollon and Ortiz projects on stream. The merger with International Goldfields provides Santa Fe the working capital to achieve those goals, plus rounds out the exploration pipeline for continued growth of the company’s resource base,” said Carson.
Under the terms of the heads of agreement, International Goldfields would advance Santa Fe A$2-million within five business days to secure the company’s option to the Mogollon project, and for working capital purposes.
Funds for this advance would be raised by way of a single tranche placement of more than 66.6-million shares, available under the company’s 15% capacity.
International Goldfields would also issue one free attaching unlisted option for every two placement shares subscribed for, exercisable at 3c a share with an expiry date of two years from allotment. The issue of the attaching options would be subject to shareholder approval.
A further A$2-million would be provided by International Goldfields to Santa Fe before the end of October for debt repayment and general working capital purposes.
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