Tudor to acquire American Creek, increasing Treaty Creek stake to 80%
TSX-V-listed Tudor Gold has entered into a binding letter of intent to acquire American Creek Resources in an all-share transaction that will increase its ownership in the Treaty Creek gold/copper project in British Columbia to 80%.
Currently, Tudor holds a 60% interest in Treaty Creek, with American Creek owning a 20% carried interest. The remaining 20% is held by project partner Teuton Resources.
Under the proposed arrangement, American Creek shareholders will receive 0.238 Tudor shares for each share held, representing a 40% premium to American Creek’s closing price on June 6 and a 37% premium based on the companies’ five-day volume-weighted average prices.
The transaction, to be implemented by way of a court-approved plan of arrangement, will result in American Creek shareholders owning about 30% of the combined company.
Tudor president and CEO Joe Ovsenek said the consolidation solidified Tudor’s position at Treaty Creek, which hosts the large Goldstorm deposit and other mineralised zones. “With an increased ownership of the Treaty Creek project, Tudor is better positioned to attract a wider range of potential investors to this high-quality gold/copper asset,” he said.
American Creek CEO Darren Blaney said the transaction was a logical next step to unlock additional shareholder value.
Upon completion of the transaction, the combined company will have about 374.9-million shares issued and outstanding.
Tudor has also agreed to settle up to C$1.22-million in severance payments to certain American Creek insiders through the issuance of Tudor shares at a price of C$0.537 a share, subject to regulatory approval.
The proposed transaction remains subject to conditions including shareholder, court and TSX-V approvals. A special meeting of American Creek shareholders is expected to take place in the third quarter, with closing targeted by September 30.
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