McEwen to buy Canadian Gold for C$0.60/share in all-stock deal

[Underground train in mine, carts in gold, silver and copper mine.]
TomasSereda/iStock via Getty Images

McEwen (NYSE:MUX [https://seekingalpha.com/symbol/MUX]) said Tuesday it agreed to acquire [https://seekingalpha.com/pr/20264284-mcewen-inc-and-canadian-gold-corp-announce-arrangement-agreement] Canadian Gold (OTCQB:STRRF [https://seekingalpha.com/symbol/STRRF]), owner of the past-producing Tartan Lake gold mine in Manitoba, in an all-stock transaction that values each Canadian Gold share at C$0.60.

Under the deal terms, each Canadian Gold (OTCQB:STRRF [https://seekingalpha.com/symbol/STRRF]) shareholder will receive 0.0225 McEwen (NYSE:MUX [https://seekingalpha.com/symbol/MUX]) common shares for each Canadian Gold Share held; upon completion of the transaction, existing McEwen and Canadian Gold shareholders will own ~92% and 8%, respectively, of the combined company.

Canadian Gold's (OTCQB:STRRF [https://seekingalpha.com/symbol/STRRF]) principal asset is its 100% interest in the Tartan Lake gold mine project, a high-grade gold project and former producing mine with existing infrastructure and significant exploration potential.

McEwen (MUX [https://seekingalpha.com/symbol/MUX]) said the potential development of the Tartan Lake mine has many similarities to its Fox Complex, including ramp access, mining method and proposed process plant design, which could leverage the company's internal skills.

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