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Americas Silver closes acquisition of Pershing Gold, announces financing package for Nevada gold project

The combination is expected to create a precious metals growth company to develop the Relief Canyon project

gold bars on US dollars
Shares of Americas Silver powered higher in Toronto on Thursday

Americas Silver Corporation (TSE:USA) (NYSE:USAS) announced Thursday that it had closed the acquisition of Pershing Gold Corporation, sending shares soaring in Toronto.

The junior mining company also announced a financing package to fund the development of the Relief Canyon project in Nevada, which is on track to deliver its first gold pour in 4Q 2019.

Shares of Americas Silver powered nearly 14% higher on Thursday afternoon to sit at C$2.35 in Canada and US$1.76 south of the border.

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Under the terms of the transaction, Pershing shareholders receive 0.715 common shares of Americas Silver for each common share of Pershing in a share exchange. Shareholders of Pershing can then elect to exchange those shares for new non-voting preferred shares of Americas Silver or common shares based on the exchange ratio at a value of US$1.69 per Pershing common share.

Americas Silver and Pershing shareholders will own approximately 64% and 36% on an undiluted basis. Pershing shares will cease trading on the Nasdaq, Frankfurt and Toronto stock exchanges.

"The closing of the Pershing acquisition is a landmark event for Americas Silver shareholders,” said Darren Blasutti, president & CEO of Americas Silver. “The company can immediately begin construction at Relief Canyon now that the transaction has closed, and we have secured financing and Board approval.”

Sandstorm financing

The company also announced that streaming company Sandstorm Gold Ltd (TSE:SSL) had agreed to primarily fund the construction of Relief Canyon in a US$42.5 million financing package that includes a US$25 million advance payment. In return, Sandstorm will receive around 32,000 ounces of refined gold over a five-and-a-half year period beginning after the first gold pour at the project.

Relief Canyon is expected to have an average life of mine production of approximately 91,000 ounces of gold per year over a nearly 6-year mine life.

Contact Angela at [email protected]

Follow her on Twitter @AHarmantas

Quick facts: Americas Gold and Silver Corporation

Price: 2.1 CAD

TSX:USA
Market: TSX
Market Cap: $184.2 m
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