London Gold offers $25M for Bolivia-focused Bocana

Privately held London Gold LLC is moving towards a $25 million (C$35 million) cash and stock deal for Americas-focused explorer Bocana Resources (TSXV: BOCA), which holds the Escala project in Bolivia.

Exact terms of the deal, including the per-share consideration being offered or a potential closing date, weren’t immediately disclosed. Trading in Bocana’s common shares will be halted until further transaction details are available and subject to the Toronto Stock Exchange’s approval.

If a deal happens, Bocana’s assets will be transferred to a newly formed entity controlled by London Gold that’s expected to be listed on the Nasdaq Exchange in the US, according to a statement Monday. Unidentified Bocana executives will form part of the new company’s management team.

Details such as the source of the $25 million for the deal or the identity of London Gold’s owners weren’t provided. Bocana didn’t immediately reply to an e-mailed request for information Monday morning.

The proposed deal “is well positioned to advance the exploration and production of several mining projects and to create long-term value for shareholders,” Bocana said in its statement. It will create “a larger and more diversified mining development platform.”

Key asset

Bocana’s main asset is the Escala gold-silver-copper project in Bolivia’s Potosí department. Located about 40 km from San Cristobal Mining’s namesake silver mine, the property covers roughly 40 sq. km. Bocana hasn’t announced drill results for Escala since January 2024, and its most recent investor presentation is dated April 2023.

Outside of Bolivia, Bocana has spent the past year pursuing growth opportunities in the U.S. These include the creation of a mineral asset tokenization joint venture with Arizore.

Under that agreement, Arizore is responsible for developing a compliance-focused platform to tokenize mining-related assets and potential production, while Bocana serves as the mining operator and jointly owns the intellectual property associated with the tokenization technology.

Bocana has also considered a proposed investment in Venture Gold, a private company advancing projects in Colorado’s historic Idaho Springs-Central City mining district – though a letter of intent announced in October lapsed before a deal could be completed.

Investor questions

A review of public records produced little information about London Gold, the proposed acquirer. U.K. corporate filings identify Irving Aronson, a South African-born businessman living in the United Kingdom, as the company’s sole active director since its incorporation in 2016. The company has filed dormant accounts for several years and has little public operating history in the mining sector.

By contrast, Bocana CEO Timothy J. Turner has a longer public record. Based in Houston, Turner has led the Calgary-based explorer since late 2022 after previously serving as CEO of United Hunter Oil & Gas. Bocana’s latest management circular says he owns about 7.3% of the company’s shares, aligning his interests with shareholders.

London Gold’s limited public profile raises questions investors are likely to ask about the proposed acquisition, including the source of the $25 million purchase consideration, the identity of the company’s beneficial owners and the financing backing its planned Nasdaq listing. Those details were absent from Monday’s announcement.

Diligence review

London Gold will provide Bocana with about $1.2 million in additional capital by July 31, according to Monday’s statement. That money will be used to secure deposits and provide working capital for a diligence review of several of Bocana’s projects “for the mutual benefit of the parties,” according to the statement.

Bocana intends to sign memorandums of understanding or letters of intent to secure each project, complete the necessary due diligence and then execute definitive agreements with each project owner, according to the statement.

Calgary-based Bocana has granted London Gold a 90-day exclusivity period. During that time, it’s agreed not to “solicit, encourage, negotiate or enter into discussions with any third party” concerning the sale of its shares, business, intellectual property or mining assets without London Gold’s prior consent.

Bocana shares haven’t traded since June 29, when they closed at 7.5¢ to value the company at about C$7.7 million ($5.5 million), TMX Group data show. The stock has traded between 0.05¢ and 34.5¢ in the past year.