Another transaction is set to occur in the silver space. Torex Gold (TSX: TXG) has entered into a definitive agreement to acquire Reyna Silver Corp (TSXV: RSLV). The announcement, made this morning, will see Reyna acquired for cash, rather than equity, making the transaction a rarity in the sector.
Under the terms of the transaction, Reyna is to be acquired for a total figure of US$26 million. Shareholders are set to receive $0.13 for each share of the company held, which represents a 53% premium over Friday’s closing price of $0.085 per share.
“The acquisition of Reyna Silver provides Torex with immediate access to new and exciting early-stage exploration projects within prolific mining camps in northern Mexico and Nevada, [..] Through the acquisition, Torex will acquire direct ownership in a suite of highly prospective exploration projects located in Mexico, with the most advanced being the Batopilas and Guigui projects in Chihuahua. The acquisition also provides Torex with the option to acquire an initial 70% interest in the prospective Gryphon Summit (located at the southern end of the Carlin-trend) and a 100% interest in the Medicine Springs projects in Nevada,” commented Jody Kuzenko, CEO of Torex Gold.
The acquisition, which follows the recent completion of Torex’s Media Luna project in Mexico, will see a suite of new projects added to Torex’s portfolio. The company has indicated that they intend to begin exploration and drilling both the Mexican assets held by Reyna, while undertaking an evaluation of the properties in Nevada.
As part of the transaction, Torex has conducted a $1.1 million private placement with Reyna at a price equal to a 25% discount to today’s close, with each unit to consist of one common share and one common share purchase warrant.
The acquisition remains subject to Reyna Silver receiving shareholding approval for the transaction, with 7.7% of the vote already having been locked up by Torex. A shareholder meeting is expected to be held in August for investors to vote on the matter, with the transaction expected to close shortly thereafter.
Torex Gold last traded at $43.56 on the TSX.
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