Merger Trend Among Juniors Continues

Vancouver — The industry trend of corporate mergers remains a common market theme, with a growing number of junior resource companies seeking synergy through combination.

Yukon-focused uranium hunters Cash Minerals (CHX-V, CHXMF-O) and Signet Minerals (SGN-V, SGTMF-O) recently agreed to merge under plans they say will position Cash as a “consolidator of uranium exploration companies.”

Under the plan of arrangement, Signet shareholders stand to receive one unit of Cash Minerals for each Signet share held. Units will consist of 0.67 of a Cash share plus half a warrant, with each full warrant exercisable at $1.75 for three years. Cash has locked up support of shareholders representing about 21% of Signet’s outstanding shares.

As one of the larger landholders in the Yukon’s Wernecke uranium district, Cash will boost its portfolio by incorporating Signet’s nearby Currie and Murphy properties.

The Wernecke area is the focus of a number of explorers evaluating the uranium potential of its iron-oxide copper-gold (IOCG), or Olympic Dam-type prospects.

Signet’s non-uranium assets, gold and base metal projects in British Columbia and Manitoba, are to be spun out into a new company, which will be held by its current shareholders.

Besides actively exploring its Wernecke Mountains-area projects, Cash recently entered an option to earn 51% of Cornerstone Capital Resources’ (CGP-V, CTNXF-O) Aillik uranium property in Labrador’s Central Mineral Belt; Cash also holds the Division Mountain coal project, in southwestern Yukon, which underwent a scoping study in early 2005, and is evaluating development of Chinese coal projects.

Signet posted a 28% gain on the proposed marriage to close up 16 at 73 per share while Cash traded even on the news at around $1.17 per share.

Copper Canyon Minerals (CPY-V, CAYRF-O) and Romios Gold Resources (RG-V, RMIOF-O) have drafted merger plans to combine their northwestern B.C.-area copper and gold projects.

The amalgamated company would be called Romios Gold Resources, and the combination would see Copper Canyon shareholders receive 1.5 shares in the new company for each share, and shareholders of the old Romios Gold swapping share-for-share.

Copper Canyon would contribute its namesake project, located adjacent to NovaGold Resources’ (NG-T, NG-X) Galore Creek copper-gold deposit. NovaGold can earn an 80% interest in the Copper Canyon project for cash payments, share issuances and completion of a feasibility study by 2011. The project contains an inferred resource of 164.8 million tonnes of 0.35% copper, 0.54 gram gold per tonne and 7.2 grams silver using a 0.35% copper-equivalent cutoff grade.

Romios has a land package of nine projects encompassing about 250 sq. km in the Galore Creek area that is adjacent to both NovaGold’s and Copper Canyon’s projects. The company recently tabled an inferred resource estimate of 1.4 million tonnes grading 4.43 grams gold, 0.22% copper and 6.4 grams silver (using a 2-gram gold-equivalent cutoff) on the Northwest zone at its Newmont Lake property.

Romios has about $3 million earmarked for exploration of its Galore Creek-area projects this year. The company also holds projects in Nevada and Ontario.

Romios shares slipped about 10% on the merger plans, closing down 7 at 66, while shares of Copper Canyon posted a 9 gain to close at 92 apiece.

Piper and Garson to unite

The boards of Piper Capital (PCL-V, PIRCF-O) and Garson Resources (GARR-C) have given the nod to a proposed amalgamation of the companies.

The pair jointly owns the New Britannia gold mine, in the Snow Lake region of northern Manitoba — Piper with 60% and Garson, 40%. Ownership consolidation of the past-producer is expected to speed up its revival.

The planned combination, subject to regulatory and shareholder approvals, would see Piper shareholders exchange their shares on a one-to-one basis for shares in the new company, while shareholders of Garson would get one new share for every 1.37931 shares held. The new company would tentatively be named Garson Gold.

New Britannia operated from 1949 to 1958 and again from 1995 through 2004, producing a total of 1.43 million oz. gold. Measured and indicated resources stand at 2.2 million tonnes grading 5.1 grams gold (about 364,000 contained ounces) plus 1.1 million inferred tonnes averaging 5 grams (about 176,000 contained ounces).

Mega wants Nu Energy

In a move to expand the African content of its project portfolio, Mega Uranium (MGA-T, MGAFF-O) has inked a deal to acquire Nu Energy Uranium (NU-V) through a share-swap arrangement.

Pending regulatory and shareholder approvals, the planned offer sees Mega Uranium issuing two shares for every three of Nu Energy, representing about a 61.5% premium based on Nu Energy’s April 26th closing price and Mega’s volume-weighted average trading price for the 10 days preceding the announcement.

The principal asset Nu Energy brings to the table is its 92% interest in the Kitongo and Lolodorf uranium properties in Cameroon. The company has also been evaluating potential opportunities in the reprocessing of low-grade secondary uranium-bearing material.

“Nu Energy holds two significant uranium projects in Cameroon and has an exceptional management team with considerable uranium expertise which can drive Mega’s expansion in African uranium exploration and development,” said Mega Uranium president Stewart Taylor in a statement.

The Kitongo project, in the Poli area of northeastern Cameroon, saw multiple rounds of explora- tion from 1971 through 1986, including radiometric surveys, mapping, trenching, drilling and two short adits, conducted by a number of government agencies and corporations. Nu Energy holds a 1,000-sq.-km exploration permit to evaluate the Kitongo deposit and additional targets previously identified by radiometric surveys.

A recent review of the project referenced historic resources identified within three deposits comprising about 13,125 contained tonnes U3O8 (28.9 million contained pounds U3O8) with an average grade of 0.1% U3O8. Another historical report discusses an estimate (not compliant with National Instrument 43-101) of more than 10,000 contained tonnes U3O8, or about 22 million lbs. U3O8.

Located in southern Cameroon, Nu Energy’s Lolodorf exploration licence covers uranium occurrences evaluated in the early 1980s by the French government and the International Atomic Energy Agency. A historical resource of over 1,000 contained tonnes U3O8 (about 2.6 million contained lbs. U3O8) was calculated with an average grade of 0.1% U3O8.

Uranium mineralization at Lolodorf is hosted in a 2- to 5-km-wide belt of syenitic intrusive rocks. Past drilling intersected pyrite- rich zones carrying uraninite and uranothorite associated with chalcopyrite, molybdenite and galena.

Shares of Nu Energy rallied 38% on the takeover news to close up $1.30 at $4.70 apiece on trading volume of more than 2.3 million. Based on its 26.7 million shares outstanding, the company posts a $125-million market capitaliza- tion. Meanwhile, Mega Uranium slipped 35 to close down at $7.43 per share.

In March, Mega Uranium entered a takeover agreement to acquire Monster Copper (mns-v, mcprf-o) for its portfolio of prospective iron-oxide copper-gold (IOCG) projects in Labrador’s Central Mineral Belt, north- central Brazil and the Yukon.

Mega’s principal uranium holdings are in Australia and host a combined resource of more than 47 million contained pounds U3O8. The company also has exploration projects in Argentina, Mongolia, Bolivia, Colombia and Canada.

Buffalo Gold (BUF.U-V, BYBUF-O) has called off its merger plans with Dynasty Gold (DYG-V, DGDCF-O) after a due-diligence review.

Buffalo’s evaluation of Dynasty’s Chinese mineral project portfolio concluded it did not meet the company’s current objectives.

Dynasty plans to move ahead on its planned exploration effort on the Hatu, Red Valley and Wild Horse projects.

At Hatu, loca
ted in the Xinjiang Autonomous Region of northwestern China, Dynasty is partnered with Avocet Mining (AVM-L, AVVGF-O). The Qi-2 deposit on the project, which has seen past production, has a resource of 16.9 million inferred tonnes grading 1.7 grams gold per tonne (913,000 contained ounces gold).

The Chinese-focused junior is also partnered with AngloGold Ashanti (AU-N, ANG-J, AGG-A), which is financing exploration of the Red Valley project in Qinghai province and Wild Horse in Gansu province.

Buffalo Gold remains focused on its Mt. Kare gold project, in Papua New Guinea, planning an $11.4-million budget for its 2007 exploration program.

Buffalo can acquire up to 90% of the project, assigned through offshore company Longview Capital Partners, from Madison Minerals (MMR-V, MMRSF-O) for staged payments and work commitments leading to completion of a bankable feasibility study.

A resource estimate conducted on Mt. Kare in 2000 tallied 14.7 million indicated tonnes grading 2.36 grams gold and 33.7 grams silver, plus 10.85 million inferred tonnes at 2 grams gold and 22.7 grams silver, using a 1-gram gold-equivalent cutoff and cutting all high-grade assays to 30 grams gold.

Buffalo also holds early stage gold, uranium and base metals projects in Australia.

Following news of Buffalo’s jitters, Dynasty shares shed 25% to close down 8 at 24 apiece. Buffalo Gold shares slipped 16, closing at $1.39.