Bonterra to Acquire Metanor in Strategic Expansion Move

Bonterra Resources (TSXV:BTR) will acquire Metanor Resources (TSXV:MTO) with the intention of creating an advanced Canadian gold exploration and development corporation, the companies announced on Monday (June 18).

The newly combined company’s first and main goal will involve expanding its presence in the Urban Barry Quebec gold camp, with the goal of building out future mining development in the area.

“Bonterra has been an extremely successful exploration company and must continue to evolve and participate in growth opportunities. We have quickly and efficiently discovered and developed the Gladiator deposit over the past two years, and now look to put our exploration skills and experience to work on the larger combined land package,” stated Nav Dhaliwal, president and CEO.

“We believe we will be able to develop a much larger and more significant resource profile within the Urban Barry camp. The availability and ownership of a permitted and expandable processing facility certainly places Bonterra in an excellent position to rapidly and cost effectively become a significant Quebec based gold produce,” he added.

As per the agreement, Bonterra will acquire all issued and outstanding common shares of Metanor for C$0.73 in equity consideration per share at an exchange ratio of 1.6039 Bonterra shares for each Metanor share; that represents an aggregate transaction value of C$78 million on a fully diluted in-the-money basis.

The transaction should result in a precious metals exploration, development and production company with one of largest contiguous land packages in the highly prospective Urban Barry gold camp.

The company will be in control of three advanced, high-grade gold deposits and significant regional priority targets. The company will be an operator of the only permitted gold mill in the region, which is surrounded by greater than 15 known gold deposits within a 100-kilometer radius.

With Metanor’s mill infrastructure in place, Bonterra will have the opportunity to significantly reduce the capital requirements and shorten the timelines to advance its Gladiator project to potential production.

Additionally, Bonterra will add both the Bachelor mine and the Barry deposit, as well as any associated exploration potential, to its existing resource portfolio. It will also gain Metanor’s strong technical team with a vast knowledge base of this rich camp.

For Metanor’s part, it will receive the financial strength and flexibility to increase production and exploration programs while leveraging and enhancing existing infrastructures, as well as garner exposure to a potential long-life asset to supplement current production.

Additionally, Metanor’s trading liquidity will increase, as will its enhanced value proposition and capital markets profile. Metanor will also be able to broaden its existing base with key strategic institutional, corporate and retail shareholders.

“Putting together two, arguably, undervalued companies like Metanor and Bonterra is extremely beneficial and logical in a number of ways,” said Greg Gibson, chairman and interim CEO of Metanor.

“Resource growth, exploration synergies and de-risking the path to production are all considerations, as well as potential to access different and larger markets and shareholders. I look forward to working with the Bonterra team, as the combined effort provides the opportunity to create significant shareholder value,” he added.

On Tuesday (June 19), shares of Bonterra closed down 3.3 percent at C$0.44, while shares of Metanor closed up 14.29 percent at C$0.64.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Bonterra Resources is a client of the Investing News Network. This article is not paid-for content.