Sudbury’s Wallbridge Mining Company is poised to acquire more ground on the Quebec side of the Abitibi Greenstone Belt.
Wallbridge has signed a letter of intent to acquire Balmoral Resources of Vancouver in an all-stock deal worth $110 million.
In a March 2 news release, the two companies are billing this as the creation of a “formidable and well-financed” exploration and mine development company within an emerging gold belt in western Quebec.
The proposed deal would widen Wallbridge’s footprint in the Nord-du-Québec region in expanding their land position from 10.5 square kilometres to 739 square kilometres.
Wallbridge’s main property in the area is the Fenelon gold mine project, where they've been running an aggressive exploration program.
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After conducting nearly 75,000 metres of drilling last year and taking a 35,000-tonne bulk sample, Wallbridge has a further 100,000 to 120,000 metres of drilling on tap for 2020.
Balmoral’s gold exploration properties in this district are considered to have significant upside.
Their main property is the Detour Gold Trend Project, along with its Bug and Martiniere West gold deposits. There's also the Grasset nickel-copper-cobalt-platinum group metal deposit, which is considered to have option value.
Under the terms of the agreement, all of the Balmoral’s shares will be exchanged at a ratio of 0.71 of a Wallbridge common share for each Balmoral common share.
When finalized, existing Wallbridge and Balmoral shareholders will own approximately 82 per cent and 18 per cent of the company’s shares, respectively.
Walbridge believes the acquisition has the potential to attract new investors and gives them greater flexibility to make further discoveries in the district and build new mines.
"This strategic transaction makes sense for the shareholders of both Wallbridge and Balmoral," said company president-CEO Marz Kord.
"The combination of our two companies creates an entity with a solid balance sheet; a diverse yet focused project portfolio; a motivated management group experienced in exploration, development and production; and the scale, resource growth potential and discovery upside that gives us the opportunity to build on the strengths of both companies.”
The deal has the support of mining financier Eric Sprott, who owns 23 per cent of Wallbridge and 9 per cent of Balmoral.
Balmoral shareholders will have their say at a special meeting on May 7.
In a statement, Balmoral president-CEO Darin Wagner is excited for the future.
"The recent exploration success at Tabasco, Ripley and throughout Area 51 speak to a large gold system which we are just beginning to unlock and which is combined in its entirety through this transaction. Today's announcement creates one of best funded exploration companies in Canada which has enjoyed tremendous support from Mr. Eric Sprott and a solid shareholder base which includes gold producer Kirkland Lake Gold who operate along the Detour Gold Trend."
Besides drilling at Fenelon, Wallbridge is also the operator and an 18 per cent owner of a group of nickel, copper and platinum group metal projects in the Sudbury Basin through a joint venture with Loncan Canada.
