 | Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here! |
(Kitco News) - West Red Lake Gold Mines (TSXV: WRLG) will acquire Pure Gold Mining's Madsen Gold mine and associated land package.
The deal was announced today and is subject to approval of the British Columbia Supreme Court in Pure Gold's ongoing proceedings pursuant to the Companies Creditors Arrangement Act.
West Red Lake has agreed to pay $6.5 million in cash, issue 28,460,000 common shares and grant a 1.0% secured net smelter royalty on the Madsen Mine as consideration for the acquisition, as well as make up to $10.0 million in deferred consideration payments.
Pure Gold Mining leave behind considerable work advancing the asset. Madsen is a past-producing mine that saw over $350M historical investment. The brownfield site has permits to restart production, along with existing infrastructure including a 800+ tonne per day mill, double ramp access, significant underground mine development, 1,275 metre shaft, tailings management facility, water treatment facility, all-season access and nearby workforce. The Madsen Mine commanded a peak market capitalization of $1.15 billion in 2021.
Mining investor Frank Giustra, who owns 18.1% of WRLG shares and has committed to lead the proposed financing, looks forward to growing the camp.
"I am proud to be supporting the company that continues the work of past generations at the Madsen Mine. The acquisition appeals to me due to its high-grade resources, modern infrastructure, potential, and strategic location. I look forward to contributing to the company's growth and energizing this iconic Canadian gold camp for future generations," said Giustra in a news release.
