River Gold, Wesdome head to the altar

Sister companies River Gold Mines (RIV-T, RVGDF-O) and Wesdome Gold Mines (WDG-V) have struck a deal to merge, combining the former’s gold-producing assets in Ontario with the latter’s advanced exploration assets in Quebec’s Val d’Or region.

Under an agreement in principle, the two will become one on the basis of 0.65 of a Wesdome share for every River share; independent committees from each company have approved the ratio.

The deal will likely close in late January, following shareholder and regulatory approval.

Current Wesdome president Paul Cregheur will become president of the combined company and River president and CEO Murray Pollitt will be chairman of the new entity until mid-2006, when he intends to step down.

Along the north shore of Lake Superior, 50 km west of Wawa, Ont., River Gold owns the Eagle River gold mine — a small, underground, high-grade operation.

In Val d’Or, Wesdome owns the past-producing Kiena mine complex — most of which is under Lac de Montigny — as well as the nearby Shawkey, McKenzie Break, Wesdome, and Siscoe properties.

With Kiena expected to return to production in mid-2006, management hopes the new company will thereafter be producing 90,000 to 100,000 oz. gold annually from its two mines.