McEwen Inc. (NYSE: MUX) (TSX: MUX) and Canadian Gold Corp. (TSX-V: CGC) have entered into a binding letter of intent for an all-stock acquisition. This strategic move will see McEwen acquiring all outstanding securities of Canadian Gold, with shareholders of the latter receiving 0.0225 McEwen shares per Canadian Gold share. This transaction values Canadian Gold at an implied price of C$0.35 per share, marking a 26% premium over the 30-day volume-weighted average price (VWAP). Post-acquisition, Canadian Gold shareholders are expected to own approximately 8.2% of the combined entity.
The acquisition is poised to bolster McEwen's asset portfolio with Canadian Gold's flagship Tartan Mine in Manitoba. The Tartan Mine is recognized for its high-grade gold deposits, existing infrastructure, and significant exploration potential. Additionally, Canadian Gold's holdings include the Hammond Reef and Malartic South properties in Ontario and Quebec, further enhancing McEwen's presence in Canada's mining sector.
Rob McEwen, Chairman of McEwen Inc., highlighted the strategic fit of the Tartan Mine with the company's existing Fox Complex and the favorable mining jurisdiction of Manitoba. He projected the potential to restart production at the Tartan Mine within 24 to 36 months, underscoring the deal's value proposition. Peter Shippen, Chairman of Canadian Gold, emphasized the benefits to shareholders, including improved liquidity and access to McEwen's financial and technical resources.
This acquisition underscores McEwen's commitment to expanding its mining operations and enhancing shareholder value through strategic investments in high-potential assets. The deal not only strengthens McEwen's position in the gold mining industry but also highlights the ongoing consolidation trend within the sector, as companies seek to optimize their portfolios and leverage synergies for growth.
