First Nordic Metals (TSXV: FNM) is continuing to consolidate land positions within Sweden and Finland, with the company this morning announcing the acquisition of Mawson Finland Limited (TSXV: MFL).
The transaction will see First Nordic take ownership of Mawson’s Rajapalot project and surrounding Rompas-Rajapalot property in Northern Finland, adding to the portfolio that includes the Barsele JV project and Gold Line Belt projects in Sweden and the Oijarvi project in Finland.
Mawson’s Rajapalot project is a development-stage asset that saw a preliminary economic assessment completed in 2023, outlining a net present value of US$211 million on an after-tax basis, alongside a 27% IRR at $1,700 an ounce gold. The project boasts contained gold resources of 867,000 ounces of gold and 4,311 tonnes of cobalt on an inferred basis.
On a combined basis, First Nordic post-transaction will boast total resources of 2.1 million ounces of gold equivalent in the inferred category, and a further 0.3 million gold equivalent ounces in the measured and indicated categories, across a land package of more than 123,000 hectares.
Under the terms of the transaction, Mawson shareholders will receive 1.7884 shares of First Nordic for each share of Mawson held. That ratio is a post-consolidation basis, with First Nordic expected to undertake a 4 to 1 share consolidation before closing of the transaction. The resulting company is expected to have 139.1 million shares outstanding, valuing the resulting company at $259 million based on current equity prices. The transaction is expected to close in December subject to shareholder and regulatory approvals.
Post-closing, the resulting company, currently referred to as NordCo Gold, is expected to have a revised name that has yet to be announced. The company will be led by incoming chairman Paul Breese, while Russell Bradford has been named as the new CEO. As part of the inducement for his employment, $1.9 million in common shares are expected to be issued to Bradford.
The board meanwhile is to see two nominees from each of First Nordic and Mawson. Current CEO Taj Singh will remain as a director of First Nordic until the transaction closes, after which he is expected to depart the company.
As part of the transaction, First Nordic is to raise $30 million via the sale of subscription receipts at a price of $0.38 per each. Each receipt is to contain common share of NordCo Gold, with no warrant attached.
First Nordic last traded at $0.445 on the TSX Venture.
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