Newrange Gold Corp (TSXV: NRG) and Mithril Resources (ASX: MTH) have proposed a friendly merger to create an Americas-focused exploration company. If successful, Newrange will acquire 100% of Mithril’s issued capital, resulting in an equity value of $11.8 million. Mithril’s key asset is the Copalquin gold-silver project in Mexico’s Durango State, which encompasses a mining district covering 70 square kilometers with a maiden high-grade resource of 2.4 million tonnes grading 6.81 grams per tonne gold equivalent.
In contrast, Newrange is primarily engaged in district-scale exploration for precious metals in Ontario’s Red Lake region. Their portfolio includes the Argosy gold mine and the North Birch project, offering additional potential for resource development.
Mithril’s CEO John Skeet views the merger as a mutually beneficial opportunity, combining Mithril’s Mexican assets with Newrange’s properties in the Red Lake district. The merger aims to enhance market presence, leverage the experienced management teams, and provide significant growth potential. The due diligence process is currently underway, with negotiations ongoing for final terms.
Under the initial proposal, Newrange will issue 18.08 consolidated shares for every 1,000 Mithril shares held, valuing Mithril at $11.8 million. The merger also includes provisions for board composition, with Mithril directors expected to become principals of Newrange. Funding for the acquisition will be raised through private placements, with proceeds allocated towards exploration and development activities at Copalquin.
Upon completion of the takeover, Newrange will rebrand as Pinnacle Silver and Gold Corp and exclusively trade on the TSXV.
