Battle North Gold up 42% on Evolution takeover news
By Peter Kennedy
Evolution Mining Ltd. [EVN-ASX], the Australian company that bought the Red Lake gold mining complex in northwestern Ontario from Newmont Corp. [NGT-TSX; NEM-NYSE] in November, 2019, is acquiring Battle North Gold Corp. [BNAU-TSX; BNAUF-OTCQX] and its nearby Bateman Gold Project.
Evolution agreed to acquire all the issued and outstanding shares of Battle North for $2.65 per share in cash. The amount represents a 46% premium over the closing price of Battle North shares on March 12, 2021 and a 54% premium based on the volume weighted average price of Battle North shares over the last 20 trading days.
Directors and officers of Battle Mountain (0.60% of the currently outstanding shares) have entered into support agreements to vote in favour of the deal, expected to close in Q2 2021.
Battle North shares jumped, rising 42% or 76.5 cents to $2.58 on volume of 13.1 million. The shares previously traded in a 52-week range of $2.28 and 54 cents.
Battle North said it planned to advance Bateman Project with the aim of becoming the next gold producer in the Red Lake camp. The company said it expected to spend approximately $59 million on initial capital development this year, including underground development, construction of an ammonia reactor, upgrades to the tailings management facility, camp and mill and the purchase of stationary and mobile equipment.
Based on the current construction schedule, the company hoped to be processing ore by the end of this year. Commercial production was expected to be achieved by the end of 2022.
Battle North recently raised almost $61.4 million from a bought deal offering comprised of common shares and flow-through shares.
Battle North’s key asset is the 100%-owned Bateman Gold Project. The company was previously known as Rubicon Minerals. The Bateman Gold Project has also undergone a change of name. It was previously known as the Phoenix Project.
It consists of the high-grade F2 Gold Deposit, more than 14,000 metres of underground development, including a commissioned shaft that goes down approximately 730 metres below surface. The surface infrastructure includes a 1,250 tpd mill, tailings facility and a 200-person camp.
According to a feasibility study, Bateman is expected to produce 603,000 payable ounces of gold over 8.2 years at an all-in-sustaining cost of US$865/oz. Total proven and probable reserves are 3.56 million tonnes grading 5.54 g/t gold or 634,838 ounces.