Reyna Silver, Reyna Gold agree to combine assets
Reyna Silver Corp. [RSLV-TSXV, RSNVF-OTCQB, 4ZC-FRA] has agreed to acquire all of the issued and outstanding shares of Reyna Gold Corp. [REYG-TSXV, REYFG-OTCQB] via a statutory plan of arrangement.
The deal is designed to create a larger-scale entity with increased access to capital to enable financing of continuing exploration of Reyna Silver and Reyna Gold’s combined exploration portfolio.
A key benefit will be the consolidation of the two companies’ joint option on the 10,300-hectare combined Carlin-style and CRD Gryphon Summit project in Eureka Co., Nevada. In connection with the transaction, Reyna Gold will assign, and Reyna Silver will assume all of Reyna Gold’s right, title, interest and obligations under a property option agreement dated August 29, 2023.
Under the agreement with Golden Gryphon USA Inc., Reyna Silver and Reyna Gold can jointly earn up to a 70% stake in the project by spending US$9.5 million on the project, making cash payments to Gryphon of US$1.1 million and issuing 1.2 million shares of Reyna Gold and an equal number of Reyna Silver shares to Gryphon.
Once the option is fully exercised, a new joint venture will be formed between Gryphon and Reyna, the terms of which will be negotiated on or before April 30, 2025. Gryphon will initially be granted a 2.0% net smelter return royalty on the project.
Under the agreement announced on Wednesday, shareholders of Reyna Gold will receive one common shares of Reyna Silver for every three shares of Reyna Gold. That implies an approximate 48% premium, based on the 20-day value weighted average price of the Reyna Silver and Reyna Gold shares as of August 2, 2024 on the TSX Venture Exchange.
In addition, it is expected that immediately prior to the transaction, up to $117,000 in accrued amounts payable by Reyna Gold (including accrued amounts owing, directly or indirectly, to certain directors and officers of Reyna Gold for accrued directors’ fees and management fees) will be converted into Reyna Gold shares at a price of $0.05 per share.
Subject to certain conditions, including the approval of at least two thirds of the votes cash by Reyna Gold shareholders, the transaction is expected to close in September, 2024.
Reyna Gold shares advanced on the news, rising 16.7% or $0.005 to $0.035. The shares currently trade in a 52-week range of $0.07 and $0.025.
Reya Silver shares rose 4.5% or $0.005 to 11.5 cents. The shares currently trade in a 52-week range of 29 cents and 10 cents.
Aside from the Gryphon Summit option, Reyna Silver is advancing its option to acquire a 100% of the Medicine Springs Project in Nevada, where the company is exploring a potentially significant silver-lead-zinc-copper CRD-skarn porphyry system.
Reyna Silver’s asset portfolio includes the Guigui and Batopoilas properties in Chihuahua, Mexico. Guigui covers the interpreted source area for the Santa Eulalia District and Batopilas covers most of Mexico’s historically highest-grade silver system.