Ridgeline Minerals (TSXV: RDG) has sold four Nevada exploration interests for $32.71 million in cash, a price roughly one-third above the company’s entire market capitalization immediately before the deal became public.
Nevada Gold Mines, the joint venture between Barrick Mining Corporation and Newmont Corporation, acquired Ridgeline’s interests in the Swift, Black Ridge, Bell Creek, and Atlas projects for US$23.15 million. The transaction closed effective August 3.
Ridgeline was valued at approximately $24.51 million on July 31, when its shares traded at $0.17. The company had about 144.2 million shares outstanding.
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Shares climbed 35.3% to $0.23 following the announcement, with approximately 1.92 million shares changing hands.
The sale transfers Ridgeline’s positions under the Swift and Black Ridge earn-in agreements, along with full ownership of Bell Creek and Atlas. Nevada Gold Mines had already been funding exploration at Swift and Black Ridge.
Ridgeline said the transaction produced a return on invested capital above 350% and valued the portfolio at a 26% premium to its 20-day volume-weighted average share price. Both figures are management calculations.
Following the closing, Ridgeline reports $33 million in cash and $3 million in marketable securities, including approximately 5.2 million shares of Spartan Metals. Based on the recent share count, that combined treasury equals roughly $0.25 per Ridgeline share, although the value of the Spartan position will fluctuate.
The company retains Selena, Big Blue, Coyote, and a 1% net smelter return royalty on Spartan’s Eagle tungsten project. South32 can earn as much as 80% of Selena by funding up to US$20 million of exploration spending.
