Alexandria Minerals Corp. [AZX-TSXV; ALDXF-OTC] shares rallied Thursday June 27 after the company said it has entered into an amended agreement with Chantrell Ventures Corp. [CV.H-NEX] that will see Chantrell acquiring all the issued and outstanding shares of Alexandria for $0.07 per share.
The new agreement marks an amendment from a previous $0.04 per share offer from Chantrell. It is also superior to a $0.05 per share bid from Agnico Eagle Mines Ltd. [AEM-TSX, NYSE] which was announced on June 13, 2019
Alexandria is a Canadian exploration and development company with strategic properties located in mining districts located in Val d’Or, Quebec, Red Lake, Ontario, and Snow Lake-Flin Flon, Manitoba.
Its key focus is a flagship property package along the fabled Cadillac Break in the Val d’Or area, including the Orenada gold project. On June 6, 2018, the Alexandria announced a new resource estimate for Orenada.
The agreement announced on Thursday marks an amendment to a previous offer from Chantrell Ventures and Osisko Mining Inc. [OSK-TSX], which was announced on May 14, 2019. That offer was subject to Osisko Mining completing a reverse takeover of Chantrell and Chantrell changing its name to 03 Mining Inc.
Under the original Alexandria-Chantrell agreement, the Alexandria shareholders were entitled to receive 0.010309 common shares of the resulting issuer in exchange for each Alexandria share held immediately prior to the effective time of the Alexandria-Chantrell Arrangement.
But under the revised terms, shareholders of Alexandria (other than Alexandria shareholders validly exercising their dissent rights if any) will be entitled to receive 0.018041 common shares of 03 Mining Inc. in exchange for each Alexandria share.
News that Alexandria is at the centre of what is shaping up to be an old-fashioned bidding war sent the junior’s stock price up 27.3% or $0.015 to $0.07 on volume of 7.5 million. The shares are trading in a 52-week range of $0.02 and $0.06.
As a result of the amendment, Alexandria has postponed its annual meeting, which was scheduled for June 28, 2019. It has also agreed to raise the termination fee that would be payable to Chantrell in certain circumstances to $2.2 million from $875,000.
Now investors must wait and see whether or not Agnico decides to come back with a higher bid.
When Agnico announced its offer, the gold miner said it planned to consolidate an additional 14,819 hectares of mining claims that cover approximately 35 km of the Cadillac-Larder Lake break in the Val d’Or, Quebec gold camp.
“We believe that the key Alexandria properties are highly prospective and underexplored and could potentially provide future sources of ore at our nearby Goldex Mine,” said Agnico Exploration senior vice-president Alain Blackburn. “Agnico-Eagle has a long history of involvement with Alexandria, both as an equity investor and through the purchase of the Akasaba West property in 2014,” he said.