Shares of Temex Resources Corp (CVE:TME) more than doubled on Thursday, after the northern Ontario-focused explorer received a friendly takeover offer from Lake Share Gold (TSE:LSG).
Temex stock jumped 110% on the Toronto Venture Exchange to $0.115 in more than ten times the usual volumes with 6.9 million shares in the small-cap counter exchanging hands by early afternoon.
Lake Shore, which has two operating mines in Northeast Ontario, is proposing to acquire Temex for 0.105 of a Lake Shore share for every Temex share.
That values the Toronto-based junior at $0.13 per share based on Lake Shore’s closing price on July 15 for total transaction value of around $27 million on a fully diluted basis. Shares in Lake Shore gave up earlier gains and moved to breakeven in afternoon trade affording the company a $520 million market capitalization.
Temex said it’s a superior offer to that of Oban Mining Corporation (TSE:OBM) announced at the end of June. Shares in Oban Mining, which has South American properties, tumbled on Thursday with the $10 million company losing 4.4% on the news.
In the event that Oban decides not to exercise its right to match Lake Shore’s offer within ten business days, Temex will pay a termination fee of $691,856 to Oban and complete the transaction with Lake Shore.
The Oban match period expires on July 30, 2015. Lake Shore’s proposal includes a break fee of $1 million payable to Lake Shore.
Temex’s flagship asset is the Whitney project adjacent to Lake Shore’s Bell Creek mine and mill, Vancouver’s Goldcorp has a 40% interest in Whitney with Temex holding the remainder.
Whitney includes the past producing Hallnor, Broulan Reef and Bonetal mines and boasts a resource of 0.97 Mt grading 7.02 g/t gold for 218,100 ounces in the measured category, 2.3 Mt grading 6.77 g/t gold for 490,500 ounces in the indicated category, and 1.0 Mt grading 5.34 g/t gold for 170,700 ounces in the inferred category.