Star Royalties Ltd (CVE:STRR) (OTCQX:STRFF) has provided an update on its previously announced US$18 million gold purchase and sale agreement with Arizona Gold Corp which will be used to finance the restart of underground operations and gold production at the Copperstone Gold Mine in Arizona.
Arizona Gold announced on June 28 that it has entered into a definitive arrangement agreement with Golden Predator Mining Corp (CVE:GPY) (OTCQX:NTGSF) pursuant to which Arizona Gold and Golden Predator have agreed to merge to create a new North American-focused, near-term gold producer.
The transaction would combine Copperstone and the historic, past-producing Brewery Creek Gold Mine in Yukon, Canada.
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Under the terms of the agreement, all of the issued and outstanding common shares of Golden Predator will be exchanged on the basis of 1.65 common shares of Arizona Gold per common share of Golden Predator held.
After completing the transaction, existing Arizona Gold and Golden Predator shareholders will own approximately 55% and 45% of the proforma company, respectively, on an outstanding basis.
As part of the transaction, Star Royalties said that its executive chairman, Tony Lesiak, who is also a director of Golden Predator, will be selected as one of six board of director nominees for the proforma company.
“We would like to congratulate both Arizona Gold and Golden Predator on announcing their proposed merger,” said Star Royalties CEO Alex Pernin in a statement.
“The combination improves Arizona Gold’s balance sheet and adds a future growth asset in a tier-one jurisdiction to its portfolio. Moreover, the proposed merger is not expected to impact the development timeline for Copperstone, which remains on track for first gold production in Q1 2022.”
Pernin noted that Arizona Gold’s management team remains "focused and fully committed" on expeditiously developing Copperstone to its full potential.
"We are pleased to see Tony Lesiak nominated to the proforma company’s Board of Directors. The Copperstone gold stream continues to represent significant, near-term cash flow for Star Royalties from a highly prospective deposit in a world-class jurisdiction,” added Pernin.
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