Cunningham Mining (CML) has sealed a definitive agreement to acquire all issued and outstanding common shares of American Creek Resource in an all-cash deal valued at around $152m (C$206.27m).
The acquisition of American Creek’s shares at C$0.43 each offers its shareholders a 274% premium over the closing price on 5 June 2024.
This deal will be carried out under the Business Corporations Act (British Columbia) and completed by way of a statutory plan of arrangement, contingent on standard conditions such as court and regulatory clearances.
American Creek’s directors, officers and largest shareholder, a company controlled by Eric Sprott, have agreed to support the transaction.
They hold around 15.5% of the outstanding shares and have signed voting support agreements with CML to vote in favour of the acquisition.
CML will also pay American Creek a $300,000 signing fee by 30 September 2024 for working capital and transaction-related expenses.
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If shareholder approval is not secured or the deal is scrapped over a breach by American Creek, half of this fee will be repayable in monthly installments.
CML president Ryan Cunningham said: “We are very excited to enter into this agreement to acquire American Creek. The indirect acquisition in the Treaty Creek Property complements our existing portfolio of assets in the Golden Triangle.
“We look forward to the positive impact that the addition of the Treaty Creek Property will have on our upcoming NGTGOLD Token.”
Under the terms of the agreement, all outstanding options to purchase American Creek shares will be vested and exercisable, then cancelled in exchange for a cash payment equal to the in-the-money amount of the options.
American Creek CEO Darren Blaney said: “We are also very pleased to have Eric Sprott’s full support and endorsement of this transaction with Cunningham. We express our sincere appreciation for being able to associate with the Sprott team and for their significant and unwavering support through the years.”
