The boards of directors of Dickenson Mines (TSE) and Wharf Resources (TSE) have approved the principal terms of a merger of the two companies, subject to shareholder and regulatory approval.
Dickenson, which has a 33% equity interest in Wharf, announced earlier this year it would pursue a merger with gold-producer Wharf, which operates a heap leach mine in South Dakota. John Kachmar, president of both firms, said the companies will have a combined capacity to produce 160,000 oz gold per year.
Dickenson operates the A.W. White gold mine in northwestern Ontario. It has a 100% interest in the mine, having recently bought the 34% interest held by Cambior Inc.
A committee of the independent directors of Wharf recommended approval of the merger to the Wharf board.
The merged company will have both A (subordinate voting) and B shares. The A shares will carry one vote per share and the B shares 10 votes each. The A shares will have a coat-tail provision providing a right of conversion into B shares on a one-for-one basis in the event an offer to purchase is made to all holders of B shares and not made at the same price for A shares.
Under the merger proposal, holders of common shares of Wharf are to receive 0.9 of a new A share for each old share. The holders of A shares of Dickenson will receive one new A share for each old share held, while holders of B shares of Dickenson will receive one new B share and 0.15 of a new A share for each old share held.
Shareholders’ meetings of both companies are expected to take place during the fourth quarter of this year.
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