The merger of New Oroperu Resources Inc (TSX-V:ORO) with First Light Capital Corp to create new Americas-focused firm Anacortes Mining Corp is a great move for his company and for the Tres Cruces project in Peru, Wayne Livingstone, CEO of New Oroperu said earlier this year.
Shareholder approval for the deal, first announced in June 2021, was received for both companies in September and the transaction is expected to close in a matter of weeks.
New company Anacortes will be well-financed to make progress, with New Oroperu having closed a C$22 million private placing as part of the deal in July.
Highly advanced
A highly advanced project, where over 73,000 metres (m) of drilling has been conducted, Tres Cruces sits in northern Peru, 10 kilometres (km) from Barrick’s existing Lagunas Norte operations, which has produced over 10 million ounces of gold from oxides.
Tres Cruces is one of the highest-grade gold oxide deposits in the world with 2.5 million ounces of oxide plus sulphide gold in the indicated category at a grade of 1.65 grams per tonne (g/t).
Speaking to Proactive's Steve Darling in June this year, Livingstone said of the merger: "Now we are in a situation where it can actually launch. It's ready to go towards development and get all the work that you need to develop a feasibility."
"These folks are able to bring money and management ability to move this project quickly," he added.
Peruvian experience
Experienced engineer, executive, and mine-builder Jim Currie, CEO of First Light, will lead Anacortes as its new chief executive and president and Livingstone said the new team will also have a lot of Peruvian mining industry experience.
"I'll be involved in the transition to help on the geological side but this is more of an operational engineering approach now and the management team that's coming on board can deliver on that," he told Darling.
Currie has over 40 years of senior management experience and was chief operating officer (COO) of Equinox Gold (TSX:EQX), where he led the construction of the Aurizona mine in Brazil.
Before that, he was COO of a number of small to mid-size mining and development companies, including Pretium Resources and NewGold Inc.
Livingstone told Proactive that Currie, from the outset, had seen the merger as potentially leading to Anacortes getting its hands on more projects and more potential mines.
Under the terms of the arrangement, which was negotiated at arms-length, each New Oroperu shareholder will receive 5.815 common shares of First Light for each New Oroperu share they hold.
Based upon that exchange ratio, a total of 162.2 million First Light shares will be issued to New Oroperu shareholders based on a total of 27.9 million New Oroperu shares outstanding, which represents a total consideration of around C$76 million on a closing share price for First Light shares of C$0.47 on June 16, 2021.
The transaction constitutes a change of control for New Oroperu, and at closing New Oroperu will need to pay around C$2.3 million in change of control cash payments to five insiders.
It is anticipated that upon completion, current First Light and New Oroperu shareholders will own 16% and 84% of Anacortes, respectively, without giving effect to the private placing.
A foundational asset
Currie had said in June: "Our team has been aggressively pursuing a foundational asset for Anacortes and Tres Cruces meets several of our investment criteria. The asset provides an established resource base, significant exploration potential for both the oxides and sulphides, and several development opportunities.
"Through focused efforts on engineering and exploration, we believe we are well-positioned to generate significant value for the stakeholders of both First Light and New Oroperu."
Immediately following completion, Anacortes will consolidate its shares at a ratio of six pre-consolidation shares to one post-consolidation share.
Contact the author at giles@proactiveinvestors.com