Gold production and development company Minera Alamos has agreed to acquire Sabre Gold and its advanced-stage Copperstone gold development project in Arizona, US.
The transaction involves an exchange of shares, where Sabre Gold shareholders will receive 0.693 Minera Alamos common shares per Sabre Gold share.
Under the agreement, approximately 76.5 million Minera Alamos shares will be issued after accounting for the settlement agreements.
Post-transaction, Minera Alamos and Sabre Gold shareholders will own approximately 86% and 14% of the expanded company, respectively. No finders fees are to be paid for this transaction.
The completion of this transaction will create a diversified North American gold producer, incorporating the past-producing Copperstone mine.
Additionally, the acquisition is expected to expedite Copperstone’s return to production and has the backing of Sabre Creditors.
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By GlobalData
Minera Alamos CEO Darren Koningen said: “The Copperstone project is an ideal addition to our portfolio of low capex [capital expenditure], late-stage development projects. The site has significant infrastructure and permits in place which will allow our technical group to quickly advance the project into production.
“We have already initiated our engineering efforts aimed at fast-tracking Copperstone’s development and are working to expand our technical team under the guidance of Kevin Small, a director with Minera.”
The Copperstone project encompasses about 3700ha of surface area and mineral rights in La Paz County, Arizona.
The project is wholly held by Sabre Gold, which controls the 546 federal unpatented mining claims pursuant to long-term lease deals.
Prior production at the project included open pit mining with 2,500 tons (t) per day of combined whole ore and heap leaching from 1987 to 1993. It resulted in a total reported production of 514,000oz of gold from 5,600,000t of ore grading 0.089 oz/t of gold.
A 450-ton-per-day floatation mill was built on site in 2011. Sabre Gold started underground mining in 2012 from two declines that were earlier developed in the bottom of the open pit.
Operations were undertaken from January 2012 to July 2013 until production was suspended due to a decreasing gold price environment.
Sabre Gold president and CEO Andrew Elinesky said: “Minera Alamos is an ideal partner for Sabre Gold given their extensive experience in planning, financing, building and operating mines.
“The merger allows our shareholders to maintain exposure to the Copperstone Mine through a meaningful ownership stake in the combined company while gaining exposure to a solid portfolio of producing and near-producing assets.”
Minera Alamos has a portfolio of Mexican assets, including the 100%-owned Santana open-pit, heap-leach mine in Sonora.
