Golden Shield and Tucano Gold to join forces
Canadian company Golden Shield has announced the proposed acquisition of private company Tucano Gold, expanding its gold holdings in Brazil.
The proposed transaction will provide Golden Shield with continued exposure to the exploration upside at its Marudi Mountain gold project, in south-western Guyana, as well as Tucano’s ability to crystalise value of a near-producing high-grade gold asset in Brazil.
“Geologically, Marudi and Tucano lie in the same poorly understood gold belt, and the resultant company will have a strong knowledge, operational and strategic advantage in making future discoveries,” said Golden Shield executive chairperson Leo Hathaway.
Tucano CEO Jeremy Gray added that the two companies were a “great fit”. “The combination will help unlock the exciting potential of Golden Shield’s exploration projects in Guyana and create a platform for future growth as Mina Tucano starts generating significant cash flow amidst a backdrop of record gold prices.”
The proposed transaction is expected to be structured as a reverse takeover. In terms of a letter of intent, securities of Golden Shield will be consolidated on a ten-for-one basis and each shareholder of Tucano will receive one common share in exchange for each common share held. The exchange ratio implies a value of C$0.80 a Golden Shield share and C$0.80 a Tucano share.
Assuming completion of the proposed transaction, and before additional equity financing is completed, the shareholders of Golden Shield and Tucano Gold would own about 12.9% and 87.1% of the common shares of the company respectively, and the company is expected to have approximately 55-million shares issued and outstanding.
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