THE BOURSE WHISPERER: International Goldfields (ASX:IGS) and United States-based, Santa Fe Gold Corporation (OTCBB:SFEG) have entered into a conditional Binding Heads of Agreement (HoA) to merge.
In an announcement to the ASX the merged entity was described as a diversified, well-funded and low cost gold-silver explorer, developer and miner.
It will have the advantage of being listed on the ASX and also traded on a major United States exchange or on the OTC Bulletin Board.
Company projects will scattered across emerging mining districts including West Africa, Brazil and the south-west US.
The combined entity will have an initial market capitalisation of approximately $70 million, cash reserves of at least $10 million, low cost gold and silver production of 28,000 ounces per annum (gold equivalent), an operating mill, near term development assets and a portfolio of advanced exploration assets.
“The combination of International Goldfields’ exploration assets in emerging global mining districts with Santa Fe’s portfolio of low-cost mining and exploration assets in New Mexico, together with the combined skills of the two experienced management teams, will create a new merged company capable of adding significant value for its shareholders during a time of robust gold price,” International Goldfields chief executive officer Travis Schwertfeger said in the copany’s announcement to the Australian Securities Exchange.
Schwertfeger was joined by Santa Fe chief executive Pierce Carson to sing the praises of the merger.
“Santa Fe’s projects have had significant exploration and development, plus we successfully achieved commercial production at our Summit mine in early 2012,” Carson said.
“Our focus is on increasing production at Summit and bringing the Mogollon and Ortiz projects on stream.
“The merger with IGS provides Santa Fe the working capital to achieve those goals, plus rounds out the exploration pipeline for continued growth of the company’s resource base.
“At full production, we anticipate low production costs at our mines that will rival major producers worldwide.”