THE BOURSE WHISPERER: Canada-focused Coventry Resources (ASX:CVY) is soon to be dual listed via a merger with TSX-V listed Crescent Resources Corp (TSX-V:CRC).
Coventry has entered into a definitive merger implementation agreement with Crescent.
Once the merger has been finalised the combined company will make application to have its shares listed and tradable on both the TSX Venture Exchange and the Australian Securities Exchange, which Coventry said will provide its shareholders greater exposure to the North American equity markets.
Coventry is currently working up its 1.4 million ounce Cameron gold project in Canada.
Cameron gold project – JORC Resource. Source: Company announcement
The company said it anticipates the merger will enhance its profile in the North American investment community.
“This transaction provides Coventry shareholders significant potential for value growth by gaining exposure to the North American equity market,” Coventry Resources managing director and CEO Michael Naylor said in the company’s announcement to the Australian Securities Exchange.
“Coventry continues to advance and unlock value from its Cameron and Rainy River gold projects in Canada.
“Canadian investors have shown a great level of interest in the 1.4 million ounce Cameron gold project, which is located in the mining friendly jurisdiction of Ontario, as well as Coventry’s large and highly-prospective ground holding within close proximity to the 8 million ounce Rainy River gold deposit, owned by TSX-listed Rainy River Resources, one of Canada’s most exciting discoveries in recent years.”
The tie up with Crescent makes good sense for Coventry. It is a TSX-V listed gold exploration company holding approximately C$900,000 in cash and the Uncle Sam gold project in Alaska.
Crescent is looking to raise an additional C$750,000 prior to implementation of the merger, which should it do, will result in the company having approximately C$1.6 million in cash (before costs).
The outcome of the agreement will be that Crescent will acquire Coventry by means of a court sanctioned scheme of arrangement.
Following the merger, Coventry shareholders will own 87.25 per cent of the common shares in the merged entity.
“Coventry has proven highly effective in advancing the Cameron gold project since acquiring it in 2010, and we believe this transaction presents an exciting opportunity for Crescent shareholders to gain exposure to a development stage gold project and promising exploration potential in an excellent jurisdiction.” Crescent Resources president, CEO and director Don Halliday said in the announcement.
The boards of directors of Coventry and Crescent have both unanimously approved the terms of the transaction and intend to vote in favour of the merger, in both cases in the absence of a superior proposal.