The board of directors of QPX Minerals (TSE) is recommending shareholders accept a recent offer by Rea Gold (TSE) to purchase any and all outstanding QPX shares. Rea Gold offered one Rea Gold common share for every 3.4 QPX common shares in a bid circular mailed to QPX shareholders last month. The offer terminates on April 23, and is subject to acquisition by Rea Gold of at least 90% of outstanding QPX shares.
In a separate agreement with Placer Dome (TSE), Rea Gold agreed to assume Placer’s rights and obligations under an agreement between Placer and QPX. (Placer currently owns about 27% of QPX.) The agreement grants certain royalty, reversion and other rights to Placer, primarily in respect of QPX’s QR gold property near Quesnel, B.C.
The consideration payable to Placer consists of 400,000 common Rea Gold shares, and the grant of a royalty of 1% of net smelter returns from gold produced from the QR property and sold at prices greater than US$375 per oz.
The closing of this transaction is subject to regulatory approval and to Rea Gold taking up and paying for all shares of QPX tendered to it under the offer.
QPX owns 100% of the QR gold deposit which at last report contained diluted minable reserves of 1.3 million tons grading 0.17 oz. gold per ton contained within three separate but related zones.
The company has a positive feasibility report in hand which recommends production at a targeted rate of 825 tons per day to produce about 44,000 oz. gold per year.
The combined open pit-underground operation would have a mine life of about 4.3 years. The property, however, has additional reserves classed as possible which are expected to add to mine life.
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