Vancouver Radius Explorations (RDU-V) and PilaGold (PRI-V) plan to merge in order to combine the technical and financial strengths of the two companies. The cash position of the new company, dubbed Radius Gold, will increase to over $20 million with exploration permits spanning over 1.2 million ha in Central America.
According to the deal, Radius will acquire all of the common shares of PilaGold whereby each PilaGold shareholder will be entitled to receive 1 common share of Radius for every 2.25 PilaGold shares held.
Both companies are led by Simon Ridgway who feels that the combination of the businesses will have a number of advantages to the shareholders of both companies. These advantages include: the consolidation of landholdings in Nicaragua, the reduction of administrative and regulatory compliance costs and the formation of a focused and dedicated management team as well as the elimination of any perceived conflicts of interest.
The resulting entity will be named Radius Gold and the board of directors of the new company will be a combination of the existing Radius and PilaGold directors, with Simon Ridgway remaining the President and CEO of the resulting entity.
When the merger is closed, shareholders of PilaGold will receive 10,284,452 shares of Radius Gold representing 20.6% of the total 50,055,944 shares of Radius Gold that will then be outstanding.
The transaction is still subject to a number conditions, including the finalization of formal documentation, receipt of a fairness opinion by the board of directors of both Radius and PilaGold, court approval, regulatory approval, and approval of the shareholders of both companies. Both Radius and PilaGold anticipate holding shareholder meetings at the beginning of May.
Both Radius and PilaGold hold a number of gold exploration properties in Guatemala and Nicaragua.
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