Nighthawk Gold Corp. [NHK-TSXV, OTC-MIMZF] and Moneta Gold Inc. [ME-TSX, MEAUF-OTCQX, MOP-XETRA] have announced the completion of a previously announced merger deal. In connection with the merger, Moneta has changed its name to STLLR Gold Inc. and effected a 2-for-1 consolidation of its common shares.
It is anticipated STLLR will commence trading around February 8, 2024 under the ticker symbol STLR.
“Today marks a historic moment as we complete the merger between two promising companies, creating a stronger, leading Canadian gold developer,’’ said STLLR President and CEO Keyvan Salehi. “The STLLR Gold era begins with two large cornerstone gold projects, a strong balance sheet and an opportunity to create immense value for our combined shareholder base,’’ he said.
Under the terms of the arrangement, STLLR acquired all the outstanding shares of Nighthawk in a share exchange deal.
Under the deal, Nighthawk shareholders received 0.21 of a STLLR shares for each Nighthawk share. On aggregate, 39.6 million STLLR shares were issued to former Nighthawk shareholders as consideration for their Nighthawk shares. As a result, Nighthawk has become a wholly-owned subsidiary of STLLR.
The companies said they believe the transaction will create a leading gold development company by combining two cornerstone assets in Canada. They include Nighthawk’s Colomac gold project in the Northwest Territories and Moneta’s 100%-owned Tower Gold project, which is located 100 kilometres east of Timmins, Ont.
In connection with the transaction, Nighthawk said it had struck a deal with an underwriting syndicate which had agreed to purchase on a bought deal basis 36.7 million subscription receipts of Nighthawk at 34 cents per subscription receipt, generating proceeds of $12.5 million.
Net proceeds of the concurrent financing are expected to be used by MergCo to fund the exploration and advancement of the Tower and Colomac projects and for working capital.
Nighthawk Gold’s key asset is a 100%-ownership of a district-scale land position within the Indin Lake Greenstone Belt, located approximately 200 kilometres north of Yellowknife.
The Indin Lake property, which covers 90,000 hectares and is thought to contain 20 gold deposits, includes the former Colomac open pit gold mine, which produced 528,000 ounces of gold between 1990 and 1997.
However, the company is aiming show that production could resume in the future. A preliminary economic assessment forsees average potential production of 290,000 ounces annually over an 11.2-year operating lifespan.
A preliminary economic assessment for the Tower Gold Project envisages an average production profile of 261,000 ounces of gold annually over the first 11 operating years.
The merger is expected to eliminate single asset risk for both companies, enabling a differentiated strategy to focus on improved economics and efficient capital deployment with achievable, value-creation milestones from the advancement of the project.