Gold Resource Corporation (NYSE-A:GORO, ETR:GIH) revealed new developments with regards to its proposed C$30.9 million acquisition of Michigan-focused resources firm Aquila Resources Inc (TSX:AQA), which will create a diversified base and precious metals developer in North America.
Aquila is the owner of the Back Forty project, a development-stage project containing a gold-rich volcanogenic massive sulfide deposit located in the Penokean Volcanic Belt in Michigan’s Upper Peninsula.
GRC CEO Allen Palmiere told investors that Aquila recently closed the sale of its Ben and Reef exploration properties, which he called an “important step” in the process for signing an arrangement agreement.
READ: Gold Resource to acquire Aquila Resources and form a diversified North American precious and base metals producer
The two companies have now entered into a definitive agreement that will see GRC acquiring all of the issued and outstanding common shares of TSX-listed Aquila by way of a plan of arrangement under the Business Corporations Act (Ontario).
"This transaction offers an attractive opportunity to the shareholders of Aquila and GRC to develop the Back Forty Project using GRC's strong balance sheet and cash flows,” Palmiere said in a statement.
“In addition, the combination of our complementary gold-rich assets will enhance both our mineral inventory and jurisdiction diversification. The announcement by Aquila yesterday, that it had closed the sale of its Bend and Reef exploration properties, was an important step in the process for signing the arrangement agreement. With this transaction, we look forward to becoming a new intermediate gold producer with a peer leading growth profile."
In related news, key Aquila shareholders Orion Mine Finance and Hudbay Minerals Inc have voted in support of the transaction, according to a statement from GRC.
The agreement also received unanimous approval from the boards of both GRC and Aquila.
Upon closing of the transaction, the existing GRC and Aquila shareholders will own approximately 85.1% and 14.9%, respectively, of the combined company on a fully diluted basis.
GRC is a gold and silver producer, developer, and explorer with its operations centered on the Don David Gold Mine in Oaxaca, Mexico.
Contact Angela at angela@proactiveinvestors.com
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