IDM Mining’s exploration camp for the Red Mountain Project in northwest BC’s Golden Triangle region. Photo by Ellsworth Dickson.
Ascot Resources Ltd. [AOT-TSXV; OTVF-OTCQX] said Monday January 7 that it is acquiring IDM Mining Ltd. [IDM-TSXV; IDMMF-OTCQB] in a move it said will create a leading gold development company in British Columbia.
Under a definitive agreement between the two companies, Ascot will acquire all of the issued and outstanding shares of IDM. Each IDM shareholder will receive 0.0675 of an Ascot common share for each IDM share held.
The aim is to consolidate Ascot’s Premier Gold Project with IDM’s nearby Red Mountain Project, thus creating a leading high-grade gold development and exploration company in northwestern British Columbia’s Golden Triangle region. Ascot has said its near-term strategic goal is to define a new high-grade resource for underground mining, while continuing to explore nearby targets on its Premier-Dilworth properties near Stewart.
The combined entity will benefit from numerous operational and development synergies.
The deal values IDM at approximately $0.086 per share, representing a premium of approximately 54% to IDM shareholders based on the trailing 20-day volume weighted average of each company at the close of trading on January 4, 2019.
Upon completion of the transaction, it is expected that IDM shareholders will own approximately 16.7% of Ascot.
IDM shares jumped 16.67% or $0.01 to $0.07 on volume of 9.38 million. The 52-week range is 11 cents and $0.04. Ascot rose 2.36% or $0.03 to $1.30.
IDM Mining is focused on advancing the Red Mountain Project towards production. The 17,125-hectare project is located 15 km northeast of the mining town of Stewart. The project is also close to a paved highway and grid power.
Having recently announced an increased high-grade measured and indicated resource, the company envisions bulk underground mining methods, producing a gold-silver doré bars at the site
Red Mountain hosts a NI 43-101 compliant estimated resource of 2.8 million tonnes in the measured and indicated category averaging 7.91 g/t gold and 22.75 g/t silver, for 704,600 ounces of gold and over 2 million ounces of silver. On top of that is an inferred resource of 316,000 tonnes, averaging 6.04 g/t gold and 7.61 g/t silver, for 61,400 ounces gold and 77,200 ounces of silver.
IDM recently secured a provincial environmental assessment certificate for the Red Mountain Project, which provides a defined set of conditions and commitments that will allow for commercial development and operation of the project.
“The combination of Ascot and IDM creates a very attractive opportunity in northwest B.C.’s Golden Triangle for our shareholders and stakeholders,” said Ascot President and CEO Derek White. “Based near the historic mining town of Stewart, this area has hosted several prominent, profitable, and high-grade gold mines and we see that similar potential going forward,’’ White said.
“Our vision it to build profitable gold mining operations based out of Stewart, B.C. and the surrounding communities.”
IDM President and CEO Robert McLeod agreed. “In addition to long-term value for both shareholders of Ascot and IDM, this combination provides a critical mass and optionality from development of multiple high-grade gold deposits which will result in significant stakeholder benefits for citizens of the Nisga’a Nation, for my hometown of Stewart and for friends in the border town of Hyder, [Alaska].”
“The combined company will control two geological trends, hosting significant ground in the Golden Triangle, which remains highly prospective for additional gold-silver discoveries,” McLeod said.