Integra Resources (TSXV: ITR) and Millennial Precious Metals (TSXV: MPM) have entered into a definitive agreement for an at-market merger, which would see the companies combine to create one of the largest precious metals mining companies in the Great Basin.
Integra is focused on the exploration and development of the past-producing DeLamar gold-silver project in Idaho acquired in late 2017. The project consists of the adjacent DeLamar and Florida Mountain gold and silver deposits, which together hold 474,000 ounces of oxide gold and 20.8 million ounces of oxide silver in measured and indicated resources (44 million tonnes grading 0.33 g/t gold and 14.6 g/t silver).
Millennial is focused on expanding its eight gold and silver projects located in Nevada and Arizona. The company’s plan is to accelerate the development of its two flagship projects in Nevada: Wildcat and Mountain View. The Wildcat project contains an inferred resource of 776,000 ounces of oxide gold (60.8 million tonnes at 0.40 g/t), while the Mountain View project has an inferred resource of 427,000 ounces of oxide gold (23.2 million tonnes at 0.57 g/t).
With these projects, the combined company would boast one of the largest gold-silver endowments in the Great Basin not controlled by a major mining company. In addition to the development pipeline, meaningful exploration potential exists in the BlackSheep, War Eagle and non-oxide targets at DeLamar, and the Dune, Eden, Marr, Ocelot, Cerro Colorado and Red Canyon projects from Millennial, Integra said.
Under the terms of the agreement, Millennial shareholders would receive 0.23 of a common share of Integra for each Millennial common share held, which implies a consideration of C$0.18 per Millennial share (the stock was trading at C$0.17 as of 12:45 p.m. ET Monday). Existing shareholders of Integra and Millennial would own approximately 65% and 35%, respectively, of the outstanding Integra shares on closing.
“The merger with Millennial is an exciting combination that provides balanced benefits to both sets of shareholders and streamlines the permitting and development of three high-quality oxide heap-leach projects,” Integra CEO George Salamis said in a news release.
“The result of this transaction will be a combined company with a greatly strengthened balance sheet, an enhanced leadership team, and a high-quality asset portfolio with three flagship heap-leach projects in the Great Basin. This represents a significant step toward our long-term vision of building an industry leading US-focused mid-tier gold producer,” Jason Kosec, CEO of Millennial, added.
Concurrent to the merger agreement, the companies have also announced equity financings for aggregate gross proceeds of C$35 million and welcomed a new cornerstone investor in Wheaton Precious Metals (TSX, NYSE, LSE: WPM), which has agreed to invest an amount equal to up to 9.9% of the issued and outstanding Integra shares. The equity financing also includes participation by Beedie Investments, an existing lender and shareholder of Integra.
The net proceeds of this financing are expected to be used by Integra to fund an updated mineral resource estimate and mine plan for the DeLamar project, the preparation of a mineral resource estimate and preliminary economic assessment on Millennial’s Wildcat and Mountain View projects, as well as ongoing baseline work for additional permitting and exploration at the companies’ respective projects.
“The industry is in need of consolidation, and the support amongst the investment community and from Wheaton for this merger and concurrent financing has been resoundingly positive,” Salamis said.
Shares of Integra Resources fell 3.8% by 1:00 p.m. ET following the news. The company has a market value of C$59.8 million.