West High Yield closed up more than 400 percent on Thursday after announcing the sale of its magnesium assets to a US buyer.
Junior miner West High Yield Resources (TSXV:WHY) closed up more than 400 percent on Thursday (October 5) after announcing the sale of its magnesium assets for US$750 million.
The company said it has reached an agreement to sell its interests in the Record Ridge South, Midnight and OK mineral properties to Maryland-based Gryphon Enterprises.
“The proposed transaction is great for our shareholders who have been supportive and patient in this very long and arduous process,” said Frank Marasco, president and CEO of West High Yield.
West High Yield’s share price spiked almost 1,000 percent after the statement was released Thursday morning. The deal shows the company’s share price has been suppressed for the past four years due to poor market conditions for junior miners, Marasco told Bloomberg.
The assets sold are located near Trail in BC, just north of the Washington state border. “If you calculate the three sections of the land, there is about 3,000 years of supply” of magnesium that can be extracted from the property, Marasco added.
Magnesium is a key industrial metal that is 40 percent lighter than aluminum, but as strong as steel. It is crucial for strengthening aluminum alloys.
According to Roskill, global growth in the magnesium market is expected to average 3.4 percent per year, reaching almost 1.2 million tonnes per year by 2020. The firm expects aluminum alloys and die casting to be the fastest-growing markets at about 4 percent per year each.
West High Yield plans to call a special meeting of its shareholders in December to seek approval for the deal.
On Thursday, the company’s share price closed in Toronto at C$2, up 455.56 percent. West High Yield’s share price has jumped 2,025 percent since January.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: West High Yield Resources is a client of the Investing News Network. This article is not paid-for content.