Giustra company West Red Lake Gold to begin trading Thursday
West Red Lake Gold Mines Ltd. [WRLG-TSXV] shares are set to begin trading on the TSX Venture Exchange on January 5, 2023, following the completion of an amalgamation between the company and DLV Resources Ltd. [DLV.H-TSXV].
Under an agreement announced on September 15, 2022, DLV agreed to acquire all the issued and outstanding shares of West Red Lake by issuing 0.1215 of a DLV common share for each common share of West Red Lake. As a result, 35.4 million shares of DLV shares were issued to West Red Lake shareholders.
West Lake Gold Mines is based on Vancouver and focused on gold exploration in the Red Lake Gold District of northwestern Ontario. Its key West Red Lake project is located 15 kilometres west of the Red Lake Mine Complex, which consists of three mines and two mills operated by 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.
Details of the amalgamation were announced 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 arm’s length binding agreement that would see DLV issuing 0.1215 of a common share for each share of West Red Lake.
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.
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.