5 Gold Miners to Combine: Oban Mining, Eagle Hill Exploration, Temex Resources, Ryan Gold, Corona Gold

Oban Mining (TSX:OBM) announced that it would combine with Eagle Hill Exploration (TSXV:EAG), Temex Resources (TSXV:TME), Ryan Gold (TSXV:RYG) and Corona Gold (CSE:CRG). The board of the new company will include Sean Roosen and Ned Goodman, while Oban’s chairman will be appointed president and CEO of the new company.

As quoted in the press release:

Oban has the option to revise the transaction structure for each bid and proceed by way of plan of arrangement should it conclude that is necessary or desirable. Completion of the transactions is subject to Toronto Stock Exchange (“TSX”) approval. The combination of these five companies will create a leading Canadian focused gold exploration and development company (herein referred to as “New Oban”).

In addition, Oban has agreed, subject to TSX approval, to complete a private placement (the “Private Placement”) with Osisko Gold Royalties Ltd (“Osisko”) whereby Osisko will invest up to $20M in common shares in the capital of Oban (“Oban Shares”) at a price of $0.11 per Oban Share (the deemed net asset value per share value of Oban), provided that such investment shall not be for more than 19.9% of New Oban. The financing commitment includes the grant to Osisko of first rights to participate in royalties and streams to be created by New Oban, pro rata financing participation rights and the right to nominate three directors to the board of New Oban. For a period of five years from the date of closing of the Private Placement, Osisko will have a one-time right, should New Oban seek financing through the debt or equity markets, to provide first financing to Oban equal to $5 million in exchange for the granting by Oban of a 1% NSR over such properties as are wholly owned by Oban immediately following completion of the Private Placement.

Oban chairman, John Burzynski, said:

“This is an exciting new chapter in Canadian mining. “Post-consolidation, New Oban brings together major exploration assets in Ontario and Quebec under experienced management in a well-capitalized vehicle, with over $65M in cash and a significant global gold resource. We are particularly excited to have Dundee Corp. and Osisko as key shareholders in the resultant company, by virtue of their respective existing holdings in four of the companies involved in the combination and Osisko’s investment in this new vehicle

Click here to read the Oban Mining (TSX:OBM) press release