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Radisson to acquire New Alger Project with Renforth Resources

Aug 11, 2020

Radisson Mining Resources has signed a binding agreement in which Radisson will acquire a 100% interest in Renforth’s New Alger Gold Property in northwestern Quebec. The pair will also enter into a long-term strategic relationship through a 9.6% equity investment by Radisson in Renforth. The relationship aims to leverage regional synergies and unlock significant value for shareholders of both companies from one of the most prospective mining camps in the world.

The transaction will significantly expand Radisson’s claims in the Bousquet-Cadillac mining camp, which will create scale, and which Radisson believes will enhance its exploration potential and increase O’Brien’s appeal to investors and larger producers. In addition, the deal significantly bolsters Renforth’s balance sheet and allows for a significant expansion in planned exploration spending aimed at realizing the full potential of its attractive project portfolio that includes Parbec, Nixon Bartleman, Malartic West, Surimeau and Denain-Pershing. The transaction is expected to provide for significant benefits to both Renforth and Radisson and their respective shareholders.

Transaction highlights:

  • Radisson will acquire a 100% interest in New Alger for the following consideration: 
    • 12 million class A common shares of Radisson will be issued to Renforth upon closing of the transaction;
    • $0.5 million in cash upon closing of the transaction;
    • a $1.5 million cash contingent payment, payable on the earlier of the announcement of commercial production at New Alger, a sale of New Alger for more than C$40 million or a change of control of Radisson.
  • Renforth plans to complete a concurrent financing to raise approximately $3.24 million in cash proceeds, which will be backed by a 9.6% strategic investment by Radisson into Renforth. 
    • The financing is anticipated to be a charity flow-through financing, pursuant to which Renforth plans to issue 24 million flow-through shares at $0.135/share, which would represent a 145% premium to Renforth’s most recent financing
  • The potential transaction value to Renforth (including contingent payments) is estimated at approximately $9.5 million, based on the three-day volume weighted average share price for Radisson.

Tags: Quebec / Deals & Financial / Gold / All Articles