Merge Between Australia’s Chalice and Canadian Gold Developer


( – Australian gold business Chalice Gold Mines on Monday broadcast an amalgamation with Canadian gold developer Coventry assets, which would supply the blended assembly the economic capability to progress the Cameron gold task, in Ontario, while continuing a global search for other assets.

ASX- and TSX-listed Chalice said the proposed amalgamation with Coventry, which trades on the ASX and TSX-V, was the first step in its scheme of acquiring quality assets, while maintaining its money balance at about A$55-million.

Coventry’s Cameron gold deposit has assessed and indicated resources of 567 000 oz at 2.45 g/t and an inferred asset of 829 000 oz at 2.11 g/t.

Chalice MD account angled commented that the project’s good degrees and investigation upside promise attracted its vigilance. “The Cameron gold task is a value asset in a low-risk, favourable mining jurisdiction.”

A January 2013 initial financial assessment (PEA) determined a mine could make 61 000 oz/y at an mean money cost of $852/oz over ten years. It approximated primary development and capital expenditure of $110-million. Chalice cautioned, however, that the PEA encompassed inferred assets that were geologically too speculative to categorise them as inorganic reserves. “There is no certainty that the PEA will be realised,” it asserted.

The businesses have performed a binding term sheet for the proposed merger, under which the Canadian developer’s shareholders will obtain one Chalice share for every 1.78 Coventry portions.

Coventry leader Steven Chadwick said that living Coventry shareholders would hold roughly 17% of the amalgamated entity and would extend to have exposure to the task through their shareholding in Chalice, while furthermore benefiting from Chalice’s powerful balance sheet, experienced mechanical group and the future growth of the company.

“Shareholders will furthermore have exposure to any future transactions that Chalice undertakes as it hunts for further value resource assets globally,” he commented.

The amalgamation is subject to a 14-day due diligence and will require acceptance by two-thirds of Coventry security holders voting at a special meeting, as well as acceptance from the Supreme Court of British Columbia and the various stock exchanges engaged. The amalgamation is not subject to approval by Chalice shareholders.

Chalice said in a statement that the deal had the support of both planks of directors. Coventry’s business agency in Perth would transfer to the Chalice business agency and Chadwick would extend to support the handover and future development of the Cameron project in his living role as mechanical supervisor for Chalice, with in-country operations expected to stay unchanged. The Chalice board, as the surviving entity following the amalgamation, was expected to remain unchanged.

The merger is expected to be wrapped up by mid-December.