New York Stock Exchange (NYSE)-listed gold producer Contango ORE has expanded its footprint with the acquisition of HighGold Mining and Avidian Gold Alaska.
HighGold Mining Acquisition
Contango sealed a definitive agreement to acquire all issued and outstanding shares of HighGold Mining through a court-approved plan of arrangement under the Business Corporations Act (British Columbia).
The exchange ratio, based on volume-weighted average prices (VWAPs), implies a total HighGold equity value of around $37m (C$27.08m), with each HighGold share being exchanged for 0.019 shares of Contango common stock at a total consideration of C$0.55 per HighGold share, marking a 59% premium based on the 20-day VWAP of both companies.
Creation of Leading Alaskan Gold Company
Post-transaction, Contango shareholders will own around 85% of the combined entity, while HighGold shareholders will hold the remaining 15%, resulting in the creation of a leading Alaskan gold company with significant growth potential.
This acquisition will also enable Contango to leverage its expertise and resources for the development of the Johnson Tract Project, a high-grade polymetallic deposit with promising production potential.
The transaction will benefit HighGold shareholders through a substantial premium, continued exposure to exploration upside, and reduced risk, while the directors and officers of HighGold have pledged their support for the agreement.
Avidian Gold Alaska Acquisition
Additionally, Contango agreed to acquire Avidian Gold’s Alaskan subsidiary, Avidian Gold Alaska, for a total consideration of up to $3.4m, payable in a combination of cash and Contango shares.
Avidian Gold Alaska owns the Golden Zone and Amanita NE gold properties and has an option to acquire 100% of the Amanita gold property, positioning Contango for further growth in the Alaskan gold sector.
The completion of the acquisition will leave Avidian debt-free and is subject to shareholder approval.
Insight
The acquisitions by Contango ORE not only expand its portfolio but also position the company for significant growth in the Alaskan gold mining industry. Leveraging its experience and resources, Contango aims to accelerate the development of valuable deposits, increasing its potential for production and revenue. The strategic move to acquire both HighGold Mining and Avidian Gold Alaska demonstrates Contango’s commitment to growth and adds valuable assets to its existing operations.
