Monarch Gold (TSX: MQR) this morning announced that it is being acquired by that of Yamana Gold (TSX: YRI) for what amounts to a 43% premium to the closing price of the company on Friday. The transaction will see Monarch acquired for a price of $0.63 per share, or $200 million.
The transaction however is not entirely straight forward, with Yamana largely interested in just the Wasamac and Camflo properties currently held by Monarch. To this effect, Monarch will first conduct a spin out of its other properties to current shareholders. The spin out will be conducted via a newly formed company that is to hold these other properties, as well as certain assets and liabilities of the company. The spin-out is to have an implied value of roughly $47.5 million.
Included in the new spinco will be that of the Beaufor mine, the McKenzie Breaka property, the Croinor Gold property, the Swanson property and the Beacon Gold mill and property, along with all related assets and liabilities of these properties. $14 million in cash will also be included in the newly formed company.
Once the spin out is completed, Yamana will then acquire what remains of Monarch for $0.192 in cash for each share held of Monarch, as well as 0.0376 of a Yamana share, said to be valued at $0.288 per share. Finally, shareholders will also receive 0.20 of a spinco share for each Monarch share currently held, with each full share said to have an implied value of $0.75 per share.
The proposed transaction, which is to be approved by Monarch shareholders at a December meeting, is expected to close in early January 2021.
Monarch Gold last traded at $0.44 on the TSX.
Information for this briefing was found via Sedar and Monarch Gold Corp. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
