Vancouver —
The marriage would combine the companies’ joint-venture interests in the Timmins gold project, as well as other properties in the Abitibi greenstone belt of northeastern Ontario and northwestern Quebec.
Lake Shore would issue one share for every 1.5 Holmer Gold shares. The valuation was reached by independent analysis and will be voted on by shareholders. Regulators would then decide if the deal should be approved.
Since optioning the Timmins gold project in mid-2003, Lake Shore has drilled more than 31,000 metres of core, resulting in a 200% increase (using uncut grades) in resource figures over a 2002 estimate.
The project now has an indicated resource estimate of 1.4 million tonnes averaging 11 grams gold per tonne, based on a cutoff grade of 6 grams gold per tonne. An additional 200,000 tonnes of inferred resource at 8.7 grams gold has been outlined.
Lake Shore has 34.5 million shares outstanding and trades around $1. Holmer has 48.8 million shares outstanding, and trades at 60-65.
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