Ursa Major Minerals signs merger deal with platinum explorer

Prophecy Platinum is merging with struggling Sudbury-area nickel producer Ursa Major Minerals to form a new mid-tier miner.

According to a March 2 release, the “new Prophecy” becomes a mid-tier miner with a roster of platinum and nickel properties that includes Ursa's mothballed Shakespeare PGM-nickel-copper open pit, 70 km west of Sudbury.

Mine operations at Shakespeare were suspended this winter following the expiration of its processing agreement with Xstrata Nickel on Dec. 31. The two parties could not reach a new contract, however the mine site is fully-permitted for an onsite mill.

Under the business combination deal, Prophecy will issue one common share for every 25 outstanding common shares of Ursa.

Both companies expect the transaction to be complete by June 15.

“If required,” Ursa and Prophecy will call a special shareholders meeting in late May to approve the deal.

If approved, Prophecy plans to publish a new feasibility study of Shakespeare and will study the project's economics and metal prices before making a production decision. “At the appropriate time, joint venture partners may be sought to develop Wellington, Lynn Lake and Shakespeare,” according to the press release.

The Vancouver-based Prophecy is a nickel and PGM exploration outfit with projects in Argentina, Uruguay and Canada, including its Wellgreen project in the Yukon and its Lynn Lake project in Manitoba.

In a statement, Prophecy chairman John Lee called Shakespeare a “production-ready mine” that will raise his company's profile and investment appeal.

“Ursa's board recognize the synergy and that this deal is potentially accretive to both Ursa and Prophecy shareholders.”

Ursa Major president Richard Sutcliffe, who will become a board director in the new company, is optimistic this venture will kick-start production at Shakespeare.

“We are very pleased to have reached the agreement with Prophecy which provides an excellent opportunity to advance the Shakespeare Mine. Our shareholders will participate in a combined company with an outstanding portfolio of assets and substantially improved market capitalization and liquidity.”

Last year, Sutcliffe's management was challenged by a group of shareholders who were dissatisfied with the company's poor showing on the TSX, its falling share prices and the lack of a growth strategy. But a majority of shareholders voted against introducing a new board in June.