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Tuesday, June 29, 2021 - 14:54:05
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Mining News Pro - Southern Gold has struck commercial terms with its joint venture partner Bluebird Merchant Venture for the sale of its interest in the Gubong and Kochang projects, in the Republic of Korea.
Bluebird previously elected to purchase Southern Gold’s 50% interest in the assets after the Australian miner did not support Bluebird’s proposed decision to mine for each project in mid-2020.
Under the terms now agreed, Bluebird would issue either 200-million of its own shares, at a deemed price of 5c each, or would issue at least 50-million shares, but less than 200-million shares, and would pay Southern Gold 5c a share for each share it does not issue, for a deal value of $10-million.
“Southern Gold has effectively agreed to a share swap deal where we will exchange our subsidiary’s 50% interest in the two joint ventures for an approximate 30% interest in Bluebird, once all shares are issued,” said Southern Gold MD Simon Mitchell.
“The value of this position will be more easily ascertained by investors, given Bluebird’s listing on the LSE, with a current deal value of approximately A$13.2-million at the current exchange rates. In other words, the value of the shareholding in Bluebird will constitute more than 200% of our A$5.9-million enterprise value given our March cash balance of A$9-million and market capitalisation of A$14.9-million.”
Mitchell said that the Bluebird shareholding would be a very valuable equity interest, and he was expecting a significant increase in value as Bluebird advances both the Kochang and Gubong projects towards their near-term objective of gold and silver production.
The first 50-million Bluebird shares will be issued on Tuesday under Bluebird’s placement capacity, while the remaining 150-million shares could be issued on the basis of an approved prospectus.
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https://www.miningnews.ir/En/News/614780
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