ValGold shareholdes green light Metalla plan of arrangement

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Source: ValGold Resources Ltd.

ValGold Resources Ltd. [VAL-TSXV] shareholders have given the green light to a previously announced plan of arrangement that will see the company being acquired by Metalla Royalty Streaming Ltd. [MTA-TSXV, MTAFF-OTCQX, X9CP-Frankfurt].

Under the arrangement, all of ValGold’s issued and outstanding shares will be exchanged for Metalla common shares on the basis of 0.1667 of a Metalla share for each share of ValGold.

When the deal was announced on May 10, 2018, it implied a consideration of $0.13 per ValGold common shares. The undiluted equity value of the transaction was approximately $7.2 million.

ValGold Resources is a long-established Canadian royalty and mineral exploration company. It holds a net smelter royalty on the Garrison Gold Project in the Golden Highway Mining Camp near Timmins, Ontario. It also wholly-owns the prospective Tower Mountain Gold Project near Thunder Bay, Ontario. The company’s other assets include exploration properties in Venezuela near the Kilometre 88 District and Brisas Cristinas Project.

Osisko Mining Inc. [OSK-TSX] owns 100% and is the operator of the Garrison Gold Project, which consists of a portfolio of properties spanning a 50-km distance along the Destor-Porcupine Fault Zone, encompassing 16 non-contiguous properties, including the Garrcon and Jonpol properties, 903 Zone, and Buffonta and Golden Pike advanced exploration properties.

ValGold’s primary asset is a 2% net smelter royalty on a significant portion of the project, including all the claims which were the subject of a NI 43-101 compliant resource estimate in 2014.

According to the estimate by ACA Howe International Inc., the Garrcon and Jonpol properties contain a measured and indicated resource of 30.07 million tonnes, grading 1.24 g/t gold or 1.2 million ounces. On top of that is an inferred resource of 7.9 million tonnes, grading 3.19 g/t gold or 808,000 ounces.

As of the end of January 2018, Osisko had completed 85,000 metres of new drilling since the 2014 resource update to complement the 108,000 metres drilled at Garrison by previous operators. Osisko was expected to announce an updated resource estimate this month.

The 903 Zone was expanded substantially through drilling in 2017. It is not part of the 2014 resource estimate. However, it should be noted that ValGold’s royalty covers only a portion of the 903 Zone.

The exploration budget for 2018 is approximately $3 million, including: resource estimation work, additional resource-oriented infill drilling; metallurgical work; and exploration drilling.

Upon completion of the arrangement, current ValGold shareholders and optionholders will own 11.2% of the issued and outstanding common shares of Metalla.

Metalla shares closed at 75 cents on July 24, 2018, leaving the company with a market cap of 56.47 million, based on 75.29 million shares outstanding. The shares are trading in a 52-week range of 75 cents and 88 cents.


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Filed in: Gold, Resources

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