NexGold Set To Acquire Signal Gold In All-Stock Deal
Consolidation has continued in the gold space, with NexGold Mining (TSXV: NEXG) again being involved in a transaction, which follows its acquisition of Treasury Metals earlier this year. The latest target is Signal Gold (TSX: SGNL), and its Goldboro Gold project in Nova Scotia.
The all-share transaction will see two single-asset developers come together in a move that is said to eliminate risk for shareholders. Both projects, which are in advanced permitting stages, are expected to see completion of project permits in 2025. Presently, Goliath has federal environmental assessment approval, while Signal holds provincial environmental assessment approval.
On a combined basis, the two projects have 4.7 million ounces of measured and indicated gold, and a further 1.3 million ounces of gold in the inferred category.
“This will be a transformative transaction that combines two near-term buildable projects in Canada on a potential path to a production profile of over 200,000 ounces per year. This reflects the execution of NexGold’s strategy of targeting high-value gold projects with potential production of over 100,000 ounces and a capital expenditure of under $400 million,” commented Morgan Lekstrom, President of NexGold.
Under the terms of the transaction, Signal Gold shareholders are to receive 0.1244 of a NexGold share for each share held. On a post-transaction basis, NexGold shareholders will own 71% of the resulting company, while Signal shareholders will own 29%.
The combined company will see Jim Gowans reside as Chair, while six directors will be nominated by NexGold and two directors are to be nominated by Signal. Kevin Bullock, CEO of Signal, is to take on the role as President and CEO, while Jeremy Wyeth, the current CEO of NexGold, will be chief operating officer. Orin Baranowsky, current CFO of NexGold, will remain in his role.
“The combination of the Goliath and Goldboro Projects and the experience and skills of the combined team positions the Company uniquely with two of the next few gold mines to be built in Canada, as both projects are already significantly advanced in permitting. The synergies in the teams allows the new NexGold executive to specifically focus on core areas of expertise and competence as we progress towards a construction decision on one of our assets and continue to advance project financing discussions,” commented Wyeth on the transaction.
As part of the transaction, a non-brokered financing is to take place, for gross proceeds of $11.5 million. Management is expected to subscribe to $1.0 million of the placement, while Frank Giustra, whom is currently a major shareholder of NexGold, is also to take part in the placement.
The transaction remains subject to shareholder approval from Signal Gold, a debt restructuring related to outstanding credit facilities, and customary regulatory approvals. Closing of the transaction is expected to occur in December 2024.
NexGold last traded at $0.74 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. 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.
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