Canadian juniors MegumaGold and Osprey Gold, with projects in Nova Scotia’s largest historic bullion district, are merging their businesses to create “a leading precious metals exploration company” in a province experiencing a gold exploration boom.
The all-paper business combination will see Vancouver-based Osprey’s shareholders receive MegumaGold stock at an exchange ratio of one share for every two Osprey shares owned.
Halifax-based MegumaGold already had a 19% stake in Osprey, which it acquired in August last year. The company holds 7,176 hectares of exploration licenses, which are adjacent to Osprey’s flagship Goldenville project.
“We believe this consolidation of assets is the logical step in building a company optimally positioned to capitalize on the upside of the developing gold camp in Nova Scotia,” MegumaGold’s president, Theo Van der Linde, said in a statement.
“Combining Osprey’s assets of Goldenville and Caribou with MegumaGold’s developmental projects contained within its under-explored 107,000 ha land position presents a compelling opportunity for our shareholders,” Van der Linde said.
Sean Kirby, executive director of the Mining Association of Nova Scotia (MANS), said the deal was great news for the companies and the province, as it creates additional opportunities for job creation and the opening of new mines.
“A poll recently released by Atlantic Gold shows that 76% of Nova Scotians support gold mining because of the jobs and economic opportunity it creates,” Kirby noted.
More than 60 years after Nova Scotia’s last gold mine stopped producing the yellow metal, the Atlantic province is attracting local and international companies lured by its untouched riches and the easy access to most assets, located near existing highways.
Before Meguma-Osprey’s announcement, one of the most touted deals was the acquisition of Atlantic Gold by Australia’s St. Barbara last year. With the move, the Melbourne-based miner scooped up the Moose River complex, which comprises one producing open-pit (Touquoy) and three others in development (Beaver Dam, Fifteen Mile Stream and Cochrane Hill).