DLV to acquire Giustra company West Red Lake Gold

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DLV Resources Ltd. (DLV.H-TSXV) and West Red Lake Gold Mines Inc. [RLG-CSE] have reached an amalgamation agreement in connection with a previously announced deal that will see DLV acquiring all the issued and outstanding shares of West Red Lake.

West Red Lake is focused on gold exploration and development in the Red Lake Gold District in Northwestern Ontario. Its key asset is a 3,100-hectare property which contains three former gold mines located 16 kilometres northwest of the town of Red Lake.

The Mount Jamie and Red Summit mine properties are 100%-owned by West Red Lake. The Rowan Mine property is held in a joint venture with Evolution Mining Ltd. [EVN-ASX] (on a 69% West Red Lake and 31% Evolution basis).

Evolution is an Australian company that bought the Red Lake complex in northwestern Ontario from Newmont Corp., [NGT-TSX, NEM-NYSE] in November, 2019 for $375 million in cash.

The announcement comes after West Red Lake said it had completed a non-brokered private placement of flow-through shares that raised $4.1 million. The company issued 86.3 million flow-through shares, priced at $0.0475 with proceeds earmarked for exploration on the Red Lake property.

A numbered company (1291308 BC Ltd.) controlled by mining financier Frank Giustra acquired 62 million shares that were issued in the offering. That left Giustra with 22.09% of the issued and outstanding shares of West Red Lake.

On August 16, 2022, the companies said they had reached an arms length binding agreement that would see DLV issueing 0.1215 of a common share for each share of West Red Lake. Upon closing of the transaction, it is intended that DLV will be listed on Tier 2 of the TSX Venture Exchange as a mining issuer. RLG common shares will be delisted from the CSE.

DLV said it had agreed to assist West Red Lake with sourcing purchasers for a financing of flow-through shares priced at $0.0475 each that was expected to raise up to $4.6 million.

The Red Lake Gold District is host to some of the richest gold deposits in the world and has produced 30 million ounces of gold from high grade zones.

The West Red Lake property covers 12 kilometres of strike length along the Pipestone Bay St. Paul Deformation Zone. The company is continuing to explore the property both along strike and to depth.

On September 16, 2022, West Red Lake shares closed at $0.04 and currently trade in a 52-week range of $0.075 and $0.035. DLV closed at 50 cents. The shares currently trade in a 52-week range of 65 cents and 35 cents.

According to its financial statements, DLV had $1.94 million in cash as of May 31, 2022, but no recurring source of revenue. On July 12, 2022, the company announced a share consolidation that was expected to leave it with about 15 million shares outstanding.


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