Through a merger proposal with Judith Gold Mines, Crown Resources (VSE) expects to add over 2,000 oz. gold production per year.
Crown is proposing a share exchange on a 1-for-25 basis which would result in the issuance of about 300,000 shares of Crown.
Judith Gold’s principal asset is a 5% net smelter return royalty interest in the Kendall gold mine in Montana.
Judith holds a 100% interest in the ground on which the mine sits, subject to a mining lease with Canyon Resources (NASDAQ). The mine is expected to produce about 43,000 oz. gold per year and has a reserve life of at least five years.
The royalty interest will provide more than US$700,000 in pretax earnings to Crown based on current gold prices.
In addition, Judith has more than 2,000 oz. gold in inventory and US$100,000 in cash.
The company also holds a 50% interest in the 1,860-acre Mt. Leona property near Republic, Wash. The property is between Crown’s 30% owned Kettle and Overlook gold mines.
Insiders of Judith Gold, who control nearly 30% of the company shares, have contractually agreed to support the merger proposal. The transaction is subject to normal due diligence, plus shareholder and regulatory approval.
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