Merger and Acquisition Opportunities In The Metals Resource Stocks – Part 1C
Excelsior Prosperity w/ Shad Marquitz - 05/08/2024
Here in (Part 1C), we are literally picking up directly from where we left on in (Part 1B) of this series 2 days ago, plowing right into the M&A deals we’ve seen so far in 2024.
If you haven’t read Part 1B, then here is that link for quick reference:
https://excelsiorprosperity.substack.com/p/merger-and-acquisition-opportunities-b46
Additionally, if you haven’t read Part 1A in this series, then here is that link as well:
https://excelsiorprosperity.substack.com/p/merger-and-acquisition-opportunities
After publishing Monday’s article, I realized that I had missed one transaction that was announced in late 2023, because I thought it had occurred in early 2024, based on their name to change to First Nordic Metals this year. (technically the transaction didn’t close until 2024, so it fits right in with M&A deals this year). So we’ll kick off this article with this merger of equals M&A deal in Sweden consolidating 100kms of mineralized trend along the Gold Line belt.
Barsele and Gold Line Announce Merger to Create Scandinavian Focused District-Scale Gold Exploration & Development Company - December 13, 2023
“Barsele Minerals Corp. (TSXV: BME, OTC: BRSLF) and Gold Line Resources Ltd (TSXV: GLDL, OTC: TLLZF) are pleased to announce that they have entered into an arrangement agreement, dated December 12, 2023, pursuant to which Barsele will acquire all of the issued and outstanding common shares of Gold Line in exchange for common shares of Barsele…”
Barsele Announces Name Change to First Nordic Metals Corp. - March 18, 2024
https://barseleminerals.com/news-releases/barsele-announces-name-change-to-first-nordic-metals-corp/
Over at the KE Report last month, I interviewed Taj Singh, President and CEO, and Adam Cegielski, Chief Development Officer of First Nordic Metals (TSX.V: FNM) (OTCQB: FNMCF), to introduce the new pro-forma Company. We review how the Barsele / Gold Line merger came together last month, to create a combined company with a leading gold portfolio; underpinned by the advanced stage Barsele Gold Project and one of the largest consolidated gold exploration portfolios in Scandinavia, both in Sweden and in Finland.
First Nordic Metals – The Barsele merger with Gold Line - Gold exploration in Sweden & Finland - Apr 23, 2024
Moneta Gold and Nighthawk Gold Complete At-Market Merger to form STLLR Gold Inc. - 6 Feb 2024
STLLR Gold Inc. (formerly Moneta Gold Inc.) (TSX: ME)(OTCQX: MEAUF) and Nighthawk Gold Corp. (TSX: NHK) are pleased to announce the completion of their previously announced at-market merger by way of a court-approved plan of arrangement. In connection with the Transaction, Moneta Gold Inc. changed its name to “STLLR Gold Inc.” and effected a 2-for-1 consolidation of its common shares.
So here we see Moneta and Nighthawk merge companies and projects to try and mass up in size & scale, paired with a 2:1 share roll-back, and a name change to STLLR Gold. This may end up being a good strategy to attract more visibility, and it could make them a better takeover target for a larger company.
Having said that, the market didn’t really love this transaction, and this merger got very little attention in comparison to other M&A deals. While I didn’t have a dog in the fight in either Moneta or Nighthawk, personally I would have preferred to see both of them get acquired separately by a larger producer with experience bringing projects from development into production. Maybe that can still happen where a larger producer buys out both projects, but most are not convinced that their current teams have the experience to transition the company to a producer, and with the cost of capital much higher, and string of cost overruns at projects, they may not even be able to raise the money to build either project into a mine. Some investors have even been speculating that they may potentially end up having to sell one of the projects to pay for the development of the other one… meaning it would have been better to have not even merged in the first place. We’ll keep following the story and I’m rooting for the best outcome for the company, the projects, and investors.
Osino Resources Announces Receipt of Superior Acquisition Proposal - 19 Feb 2024
Osino Resources Corp. (TSX:OSI.V) (OTCQX:OSIIF) announces that it has received a proposal from a foreign-based mining company (Yintai) for the acquisition of all of the issued and outstanding common shares of the Company and all of the issued and outstanding securities convertible into Common Shares for cash consideration of C$1.90 for each Common Share by way of a plan of arrangement… the New Offer constitutes a "Superior Proposal" in accordance with the terms of the arrangement agreement between the Company and Dundee Precious Metals Inc. (DPM) dated December 17, 2023.
Here we saw a solid initial offer from Dundee Precious Metals, and then near the end of the consideration period the Chinese organization Yintai came in over the top with a cash offer. Osino ended up being a legitimate takeover, instead of the string of takeunders we’d been seeing since the last great takeover of Great Bear by Kinross. This was a solid win for the PM sector and for Osino investors, where the second counteroffer had them exit at all-time highs. It would be great if we saw more transactions just like this; where a stock is moving higher, then get’s a takeover offer shooting it up higher, and then a counter offer, sending up even higher to end on a high-note. More deals like this please!
OreCorp Receives Conditional Offer From Perseus Mining To Increase Offer Consideration - March 20, 2024
“OreCorp Limited (ASX:ORR) advises that it has received a conditional proposal from Perseus Mining Limited (ASX/TSX: PRU) to increase the offer consideration under its existing off-market takeover bid1 under Chapter 6 of the Corporations Act 2001to A$0.575 per OreCorp Share.
In accordance with the matching rights process set out in clause 6.5 of the Bid Implementation Deed between OreCorp and Silvercorp Metals Inc. dated 27 December 2023, OreCorp has notified Silvercorp of the terms of the Amended Proposal, and that OreCorp has determined that the Amended Proposal is a Superior Proposal.”
https://wcsecure.weblink.com.au/pdf/PRU/02786866.pdf
This ended the good ole’ fashioned bidding war between Silvercorp and Perseus Mining to scoop up OreCorp for development of their Nyanzaga Gold Project in northwest Tanzania. It is nice to see bidding wars in the sector again, as just alluded to in the comments above on Osino Resources.
As a Silvercorp shareholder, it has been interesting to watch them keep moving on good assets that other large producers then proceed to outbid them on. Silvercorp had made a move on Guyana Goldfields a few years back, but were out bid by Zijin Mining. There was a substantial break fee included in that deal, so when they didn’t get Guyana Goldfields, they plowed some of that money into Omai Gold Mines in Guyana, after a long period of doing due diligence on the jurisdiction. Then they made a move on Orecorp but were outbid by Perseus Mining. Well, Silvercorp (clearly looking to make an acquisition) just recently inked a deal with Adventus mining.
Silvercorp to Acquire Adventus, Creating a Geographically Diversified Mining Company by Adding the Advanced El Domo Project - Apr 26, 2024
“Under the terms of the Arrangement Agreement, each holder of the common shares of Adventus will receive 0.1015 of one Silvercorp common share in exchange for each Adventus Share at the effective time of the Transaction. The Exchange Ratio implies consideration of C$0.50 per Adventus Share based on the 20-day volume-weighted average prices (“VWAP”) of Silvercorp Shares on the Toronto Stock Exchange on April 25, 2024. This represents a premium of 31% based on the 20-day VWAP of Silvercorp on the TSX and Adventus on the TSX Venture Exchange, both as at April 25, 2024.”
In late March the M&A deals really started to heat up with 3 different transactions announced back to back.
Alamos Gold (TSX: AGI) (NYSE: AGI) Announces Friendly Acquisition of Argonaut Gold (TSX: AR) (ARNGF) – March 27, 2024
Karora Resources (TSX: KRR) (OTCQX: KRRGF) Announces Merger Transaction With Westgold Resources (ASX: WGX) (OTCQX: WGXRF) - April 7, 2024
Mako Mining (TSX.V:MKO) (OTCQX:MAKOF) to Acquire Goldsource Mines (TSXV:GXS) (OTCQX:GXSFF) Creating a Scalable Diversified Gold Producer with a Platform for Growth - March 26, 2024
https://makominingcorp.com/news/index.php?content_id=348
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The deal that really got the market’s attention so far this year was the Alamos Gold announcement that it was going to take over Argonaut Gold for their Magino Mine in Ontario. This is because Magino has been a high profile mine being built and just coming online now (with many delays and cost overruns), and Alamos has been one of the few larger mid-tier gold producers that just kept plowing higher and higher the last few years, bifurcating from the rest of the PM equities sector.
I’ve already written about this Alamos / Argonaut transaction in detail in a different series on growth-oriented gold producers. As a result, I’m not going to reiterate all those same comments again here. Additionally in that same piece I also broke down a few other recent M&A transactions we saw in late March with the merger of Karora Resources / WestGold Resources and Mako Mining / Goldsource Mines acquisition.
I don’t want to short change these transactions, because I was actually involved with all 3 of those transactions in my own portfolio, so I do recommend taking the deep dive on those transactions in the 2 articles linked below. (Part 6) really canvases the Alamos/Argonaut deal, and speculates we’d see an M&A deal Karora Resources soon, as their deal with Ramelius Resources had been called off. In (Part 7) we got the news it was WestGold Resources that was acquiring Karora in a merger, and took a deeper dive into the synergies of Mako Mining taking over Goldsource Mines.
Special Alert: Opportunities With Growth-Oriented Gold Producers – Part 6
Excelsior Prosperity w/ Shad Marquitz – 03/27/2024
https://excelsiorprosperity.substack.com/p/special-alert-opportunities-with
Opportunities With Growth-Oriented Gold Producers – Part 7
Excelsior Prosperity w/ Shad Marquitz – 04/10/2024
https://excelsiorprosperity.substack.com/p/opportunities-with-growth-oriented-81c
Last month in April we saw another string of M&A deals in the PM sector, that generated some headlines and more M&A discussion in the sector. We also saw BHP make a move to acquire Anglo American in another mega-merger, but so far the deal has been turned down. It’s too big of a transaction between majors to cover in this article, but still worth noting as another big transaction that investors are watching.
Revival Gold (TSXV: RVG, OTCQX: RVLGF) Agrees To Acquire Ensign Minerals And Announces Concurrent C$7 Million Equity Financing - April 10th, 2024
I don’t have a dog in the fight here on either Revival Gold or know much about Ensign, and thus don’t have much to say. Luckily for readers here, at the KE Report today we had an interview with our buddy Nick Hodge, and he weighed in on both what he looks for in M&A and this particular Revival Gold transaction at one point.
The part about M&A starts as the (5min:30sec) mark – the hot link should take people there.
Nick Hodge – Phase 2 Of Commodities Supercycle Constructive For Gold, Copper, And Uranium Stocks
McEwen Mining (NYSE: MUX)(TSX: MUX) Announces Friendly Acquisition of Timberline Resources (TSXV:TBR)(OTCQB:TLRS) - April 16, 2024
I’ve not done enough homework on how this deal shakes out in McEwen Mining’s portfolio of projects, but have been a MUX shareholder on and off many times in the past, and remember Timberline, but haven’t studied up on it lately.
G Mining Ventures (TSX: GMIN) (OTCQX: GMINF) and Reunion Gold (TSXV:RGD) (OTCQX:RGDFF), Announce Combination to Set the Stage for a Leading Intermediate Gold Producer in the Americas - April 22, 2024
New Found Gold (TSX-V: NFG) (NYSE-A: NFGC) to Acquire Labrador Gold’s (TSX-V: LAB) (OTCQX: NKOSF) Kingsway Project - April 22, 2024
https://newfoundgold.ca/news/new-found-to-acquire-labrador-golds-kingsway-project/
On April 23rd, over at the KE Report, at the (6min:30sec) mark in the interview with Dave Erfle, Editor of The Junior Miner Junky, we reviewed those 2 M&A deals just noted above. Dave gave his take on G Mining Ventures (TSX: GMIN) (OTCQX: GMINF) moving to acquire Reunion Gold (TSXV:RGD) (OTCQX:RGDFF), in more of a merger of equals, and then New Found Gold (TSX-V: NFG) (NYSE-A: NFGC) making a move to acquire Labrador Gold’s (TSX-V: LAB) (OTCQX: NKOSF) Kingsway Project, which he found less appealing for long-term Lab Gold shareholders, but a nice pickup for New Found Gold shareholders.
Dave Erfle – PMs Pull Back, Yet We See 3 Significant Gold Stock Transactions To Kick Off This Week - Apr 23, 2024
Then here’s comes this month of May and we’ve already seen 2 more deals, and the month is still young…
Contango ORE (NYSE American: CTGO) Announces Acquisition of HighGold Mining Inc. (TSXV: HIGH, OTCQX: HGMIF) - May 2, 2024
https://www.contangoore.com/press-release/contango-ore-announces-acquisition-of-highgold-mining
I like this transaction, and had remarked to a few investors, that overall, I find Alaska to be a more challenging jurisdiction for getting projects permitted and built, but that the 2 companies I was watching were Contango and HighGold and now they’re merging, which makes it even more streamlined. I think Contango has done a great job partnering with Kinross at their Manh Choh project where they have a 30% / 70% split and Kinross is doing all the heavy lifting to put this deposit into production. While they also have their Lucky Shot project for exploration, it seemed like they needed some other larger exploration development project to work on. HighGold’s Johnson Tract Project fits the bill nicely, and may have the potential to apply the same direct ship ore model used at Manh Choh to both Lucky Shot and Johnson’s Tract. Here is an acquisition that makes a lot of sense.
Treasury Metals (TSX: TML; OTCQX: TSRMF) and Blackwolf Copper and Gold Ltd. (TSXV:BWCG; OTCQB: BWCGF) to Create New Growth-Focused North American Gold Platform – May 2, 2024
https://treasurymetals.com/news/treasury-metals-and-blackwolf-to-create-new-growth-2874042/
I’ve been following Treasury Metals for a long time, from back when they only had Goliath as a project. Fast forward a few years to 2020 and they acquired the Goldlund project adjacent to their theirs from First Mining, which was a very smart transaction at the time still seems underappreciated by the market. For the last few years both projects have been combined into a single project dubbed the GGC Project. Now, with the acquisition of the Blackwolf, they bring in both the Niblack Copper-Gold development project in Alaska, and mining sector heavyweight Frank Giustra as a key strategic investor.
I need to spend some more time researching on this one, but it is likely going to go on my watchlist, and if the CEO Jeremy Wyeth is serious about building the GGC Project and getting it into production (and he was dead serious about that when I met with him at the BeaverCreek conference last September) then I could see a larger company getting interested in this company as a takeover target. So this is likely going to show up later in this series as a potential takeover target for 18-24 months out.
Once again, earlier this week on the KE Report we had an engaging discussion with our friend and colleague Dave Erfle about this whole other string of M&A deals in April and May, and we touch upon a number of the transactions just highlighted in this (Part 1C) article. It’s a great way to close up this 3 part introduction to M&A deals from the last 3 years, and moving forward this series will be reviewing companies that I believe have the right characteristics to become the next batch of merger and acquisition candidates. And now… here’s Dave!
Dave Erfle - Mining Stock M&A Analysis, Take-Unders vs Take-Overs - May 7, 2024
Thanks for reading and wishing you all prosperity in your trading and in life!
- Shad