TSX-V-listed ExGen Resources and MTB Metals have signed an arrangement agreement to merge, creating a copper, gold and lithium exploration and development company with projects in several favourable jurisdictions.

Under the agreement, ExGen will acquire all issued and outstanding securities of MTB on the basis of 0.286 of an ExGen share for each MTB share, resulting in MTB shareholders owning about 35% of the combined company.

The proposed transaction, announced on Friday, follows a letter of intent signed in August and is subject to MTB shareholder approval, court approval, TSX-V clearance, and other customary closing conditions. 

Both companies have initiated work on National Instrument 43-101 technical reports for their flagship assets.

The merger would consolidate ExGen’s 27%-held Dok property with MTB’s adjoining Telegraph copper/gold project in British Columbia’s Golden Triangle, while also giving MTB shareholders exposure to ExGen’s 20% carried interest in the Empire copper/gold mine in Idaho and its other copper and lithium assets.

“This merger combines MTB's exposure to copper and gold projects with ExGen’s carried interest in the development-stage Empire copper mine,” said MTB CEO Lawrence Roulston.

“The Empire interest offers a clear path to near-term cash flow. The combined company will have a strong balance sheet, providing a solid basis for an evolving business plan in which exploration expenditures will be funded by others. We intend to continue to expand our portfolio of royalties and carried interests as well as continuing a highly selective exploration programme aimed at acquiring high potential prospects with potential to quickly unlock value.”

ExGen CEO Jason Riley said the deal positioned the combined group for a rebound in the metals market.

“Over the past few years, ExGen has actively sought the right transactions to expand our portfolio as we believed the metal and resource markets were due for a rebound. Now, together with MTB, our combined companies will be ideally positioned with the right assets, the right technical and management team, and a rising metals market,” said Riley.

“The proposed transaction provides our shareholders with incredible leverage to both near-term production potential and a new porphyry discovery, and in a time of rising copper and gold prices. We look forward to providing further updates on a number of potential catalysts across our portfolio throughout the rest of this year.”

MTB will now seek an interim court order for the arrangement before holding a special meeting of shareholders in early to mid-December, after which a final court order will be sought.