Cascadia to gain Carmacks project in Granite Creek deal

Cascadia Minerals (TSXV: CAM) agreed to acquire Granite Creek Copper (TSXV: GCX) and its Carmacks project in western Yukon in an all-share deal worth about $11.5 million.

Granite Creek shareholders would receive 0.25 Cascadia share for the 272 million of each common share held, representing per-share compensation of about 4¢, the companies announced Monday. Based on Granite Creek’s five-day volume-weighted average trading price of 2.7¢ through Friday, the premium for shareholders would be 48%, Cascadia said.

When factoring in a concurrent non-brokered private placement equity financing by Cascadia of up to $2.25 million, supported by strategic investor Michael Gentile, the deal’s value rises to $13.8 million to $14 million. The acquisition is expected to close in July.

Carmacks “provides a strong foundation of road-accessible resources in a safe jurisdiction,” Cascadia President and CEO Graham Downs said in a release. “We look forward to building on the systematic work Granite Creek has conducted in recent years by growing near-deposit resources and exploring along trend toward the nearby Minto deposit to the north.”

Cascadia’s long history of discovery and development in Yukon gives confidence that its team is well-suited to advancing Carmacks, Granite Creek CEO Tim Johnston said.

“This merger is a logical next step for both companies and will result in a combined entity with a robust portfolio of projects that will be positioned for success in these strong copper and gold markets,” he said.

Cascadia shares fell 12.5% to 14¢ apiece on Monday at mid-day in Toronto, for a market capitalization of $9.9 million. Its stock has traded in a 12-month range of 8¢ to 47¢. Granite Creek shares were flat at 3¢ each on Monday, for a market value of $5.97 million.

New copper-gold player

The merged company would create another Yukon-focused copper-gold explorer and developer besides Western Copper and Gold, whose Casino project sits about 100 km northwest of Carmacks. The deal would add Carmacks to Cascadia’s portfolio of copper-gold projects in Yukon’s Stikine Terrane.

Carmacks is located about 210 km northwest of Whitehorse and about 30 km south of the former Minto copper mine, Minto produced about 500 million lb. of the red metal from 2007 until its closure in 2023.

Though much smaller and less advanced than Casino, Carmacks has a post-tax net present value of $230.5 million and a 29% internal rate of return, according to its 2023 preliminary economic assessment. It hosts 36.3 million measured and indicated tonnes grading 0.81 % copper, 0.26 grams gold per tonne, 3.23 grams silver and 0.01% molybdenum for 651 million lb. contained copper and 302,000 oz. gold.

Cascadia is prepared to expand the resource at Carmacks, with drilling at numerous targets planned for the fall, the company said.