Wallbridge Mining Co. Ltd. [WM-TSX, WC7-FWB] has signed a definitive deal to acquire all of the issued and outstanding shares of Balmoral Resources Ltd. [BAR-TSX, BALMF-OTC] in a $110 million all stock transaction.
Balmoral shares jumped 61% or 19 cents to 50 cents Monday on volume of almost 3.4 million. The shares were trading in a 52-week range of 10 cents and 50 cents.
Wallbridge also advanced 14.3% or 10 cents to 80 cents on volume of just over 3.0 million. The shares trade in a 52-week range of 27 cents and 99 cents.
Under the terms of the transaction, all of the issued and outstanding shares of Balmoral will be exchanged at a ratio of 0.71 of a Wallbridge common share for each Balmoral common share.
Upon completion of the transaction, existing Wallbridge and Balmoral shareholders will own approximately 82% and 18% of the combined company respectively. The exchange ratio implies a consideration of 62 cents per Balmoral share based on the weighted average price of Wallbridge common shares on the Toronto Stock Exchange for the 20 trading days ending February 28, 2020. That represents a 46% premium to the volume weighted average price of Balmoral common shares on the TSX during that period. It implies that the equity value of the transaction is equal to $110 million.
Wallbridge has been working to establish a pipeline of projects that will support sustainable production and revenue as well as organic growth through exploration and scalability.
Its portfolio includes the Fenelon Gold property, which covers 1,052 hectares and is located in northwestern Quebec, about 75 kilometres northwest of Matagami. The project is proximal to the Sunday Lake Deformation Zone, which hosts the Detour Gold Mine in Ontario and Balmoral’s gold deposits at Martiniere.
Since acquiring the property in late 2016, Wallbridge has completed an updated resource estimate and a positive pre-feasibility study (PFS) on the existing gold resource, which consists of 38,000 ounces in the measured and indicated category, plus a further 1,900 ounces of inferred material.
Balmoral recently raised $4.5 million for exploration at its Quebec projects, where Balmoral is focused on the high-grade Martiniere gold system and the large H3 (Grasset) nickel-copper-PGE discovery. Both are located on the Sunday Lake-Detour Trend in central Quebec.
The 100%-owned Martiniere property is located centrally within the Detour Gold Trend Project, approximately 45 kilometres east of, and along geological trend from Detour Gold Corp.’s (TSX: DGC) Detour Lake mine and a similar distance from Hecla Mining’s [HL-NYSE] Casa Berardi gold mine.
In March of 2018, Balmoral published an initial resource estimate for the Martiniere Gold System on the property, which is thought to contain 591,000 ounces in the indicated resource category and 54,000 ounces in the inferred category.
The Martiniere Gold System features two prominent deposits, the Bug and Martiniere West gold deposits as well as a number of other structurally-controlled gold occurrences, including a series of discoveries in the Lac du Doigt area 2.0 kilometres northeast of the main deposits.
The Martiniere property also hosts indications of VMS (volcanogenic massive sulphide) style mineralization which have locally been shown to host gold.
Balmoral also holds a 100% interest in the Grasset Property, which covers the southern portion of the Grasset Ultramafic Complex (GUC), which extends across the company’s adjacent Fenelon and Jeremie properties for a distance of at least 10 kilometres.
Grasset is one of the largest nickel sulphide deposits in Canada’s Abitibi region, and the only North American nickel deposit with at least 50,000 contained tonnes of nickel and an average nickel grade of over 1.5% not controlled by a major mining company.
The project is estimated to contain an indicated resource of 3.5 million tonnes, grading 1.56% nickel, 0.17% copper, 0.03% cobalt, 0.34 g/t platinum and 0.84 g/t palladium. The deposit remains open to depth and along strike for further expansion.