Producer Glamis Gold (TSE) has agreed to merge with junior Golden Queen Mining (TSE) by issuing one share for every five shares of Golden Queen held.
The merger, subject to shareholder and regulatory approval, will entail the issuance of 2.9 million shares of Glamis, resulting in Golden Queen becoming a wholly owned subsidiary of Glamis.
Golden Queen’s main asset is the Soledad Mountain project in Kern Cty, Calif. Minable reserves for an open-pit, heap-leach operation are estimated at 15.6 million tons grading 0.029 oz. gold and 0.53 oz. silver per ton with a stripping ratio of 3-to-1. (Glamis already operates two open-pit mines within 40 miles of Soledad.)
During a 4-month due diligence period, Glamis will carry out drilling to confirm reserves and make property maintenance payments of up to US$440,000. It is estimated that two years are required for construction and permitting, following which 65,000-75,000 oz. gold would be produced over a life of eight years. Cash costs are projected at US$200-225 per oz.
Glamis has 26 million shares outstanding.
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