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Paramount Gold Nevada Corp. (NYSEMKT:PGZ) and Calico Resources Corp. (TSXV:CKB) announced that they’ve entered into a definitive agreement under which Paramount will acquire all of Calico’s issued and outstanding shares through a plan of arrangement.
Paramount Gold Nevada Corp. (NYSEMKT:PGZ) and Calico Resources Corp. (TSXV:CKB) announced that they’ve entered into a definitive agreement under which Paramount will acquire all of Calico’s issued and outstanding shares through a plan of arrangement.
As quoted in the press release:
Pursuant to the Plan of Arrangement, Paramount will acquire each common share of Calico from Calico’s shareholders in exchange for 0.07 of a share of Paramount common stock (the “Exchange Ratio”). The Transaction implies a value of USD$0.085 per Calico common share based on the closing prices of each company’s common shares on March 11, 2016. Based on the volume-weighted average price (“20 day VWAP”) of each of the companies on the 20 prior trading days ending on March 11, 2016, the Exchange Ratio represents a premium of approximately 46.5% to Calico’s 20 day VWAP share price.
Upon completion of the Transaction, Paramount is expected to issue approximately 7,171,209 shares of its common stock to Calico shareholders, with Paramount stockholders to hold approximately 54% of the pro forma entity’s common stock, and Calico shareholders to hold the remaining 46%. Paramount stockholder will hold 57% of the pro forma entity’s common stock on a fully-diluted basis, and Calico shareholders to hold the remaining 43%. All outstanding options and warrants of Calico not exercised prior to the completion of the Transaction will be cancelled in accordance with the terms of the Plan of Arrangement.
Glen Van Treek, president and CEO of Paramount Gold Nevada, commented:
Grassy Mountain is an impressive, advanced stage project with a high grade core averaging 5.32 g/T gold that could be extracted at a very low cash cost per ounce. We believe that advancing the project to prefeasibility will add significant value to our shareholders. This acquisition is consistent with Paramount’s strategy of acquiring mineral properties with known deposits in safe jurisdictions and advancing them towards production.