Kerr Gold controls a 26-kilometre-long section of the Cadillac-Larder Lake Break that straddles the Ontario-Quebec border, including the McGarry and Cheminis gold mines in the Kirkland Lake area, and the recently acquired Larder Lake gold project, located west of the McGarry Mine. It additionally owns the Copperstone gold mine in Arizona, which is fully permitted with significant mining and processing infrastructure in place.
San Gold is operates the Rice Lake Mining Complex near Bissett, Manitoba.
"This combination reflects our new strategy of operating multiple, efficient high-grade gold mines that are located in mining-friendly jurisdictions,” Gestur Kristjansson, San Gold's president and vice-president of finance, said in a news release, noting that Copperstone would be similar in scope to the Rice Lake project.
“As well, our large portfolio of advanced gold deposits and projects in the Timmins and Kirkland Lake regions is increased immensely with our ownership in SGX Resources in combination with the current Kerr assets.”
Under the terms of the agreement, each Kerr Mines shareholder will be entitled to receive a number of common shares of San Gold for every common share of Kerr Mines. Currently, San Gold has approximately 373 million San Gold Shares outstanding and Kerr Mines has approximately 1.3 billion Kerr Mines Shares outstanding.
The two parties are looking to complete a definitive agreement by Aug. 31.