Newmont Corp. [NGT-TSX; NEM-NYSE] has agreed to acquire the remaining shares of GT Gold Corp. [GTT-TSXV; GTGDF-OTC] that it doesn’t already own in an all-cash transaction worth $456 million or $3.25 per share.
Market reaction drove GT Gold shares up 59% or $1.19 to $3.20 on volume of 7.47 million. The shares had previously traded in a 52-week range of $2.75 and 67 cents.
The companies said the transaction price represents a premium of 38% to the 20-day volume-weighted average price of GT Gold’s shares on the TSX Venture Exchange on March 9, 2021.
Newmont, which already owns just under 10% of GT Gold, is snapping up the company’s flagship Tatogga property in the Golden Triangle region of British Columbia.
The Tatogga property covers 46,827 hectares and is situated 14 km west of the Red Chris copper-gold mine and less than 1 km from the town of Iskut.
GT has made two significant discoveries on the property, including a precious metal-rich vein system at Saddle South and a gold-rich copper porphyry at Saddle North.
The companies said the transaction is supported by key GT Gold shareholders, with voting support agreements entered with directors and senior officers of GT Gold, including Ross Beaty, The K2 Principal Fund LP and Muddy Waters LLC. Together they hold approximately 43% of GT Gold shares.
“We are pleased to be announcing this transaction with Newmont representing the execution of our plan and the culmination of significant value creation for GT Gold shareholders since the formation of the company,” said GT Gold Executive Chair Ashwath Mehra.
The transaction will be implemented by way of a court-approved plan of arrangement and will require the approval of 66 and 2/3% of the votes cast by GT Gold’s shareholders and a simple majority of the votes cast by holders of GT Gold common shares after excluding votes from certain shareholders, including Newmont.
GT Gold’s maiden resource estimate for Saddle North was expected to form the basis for a PEA that was due to be completed by the end of 2020. According to the estimate, Saddle North contains indicated resources of 298 million tonnes of 0.28% copper, 0.36 g/t gold, and 0.8 g/t silver for 1.81 billion lbs copper, 3.47 million oz and 7.58 million oz silver. Inferred resources are 543 million tonnes of 0.25% copper, 0.31 g/t gold, and 0.7 g/t silver for 2.98 billion lbs copper, 5.46 million oz gold, and 11.64 million oz silver.