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A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Palladium One Mining (TSXV: PDM) is expanding its portfolio of critical mineral assets in Canada with the acquisition of MetalCorp (TSXV: MTC), an Ontario-focused junior miner with two exploration-stage projects and royalty interests in several others.
On Monday, the two companies entered a definitive agreement for a business combination, under which Palladium One would acquire all issued and outstanding shares of MetalCorp in exchange for 0.30 of a Palladium One common stock for each share acquired. This exchange ratio implies a purchase price of C$0.026 per MetalCorp share, or gross consideration of C$3.3 million.
Upon completion of the transaction, existing Palladium One shareholders would hold approximately 88% of the company’s capital stock, while former MetalCorp Shareholders would hold approximately 12%.
MetalCorp’s main assets are the North Rock copper-nickel project, which has a historical resource ranging from approximately 920,000 tonnes grading 1.17% copper to 240,000 tonnes grading 2.08% copper, and the Big Lake copper-zinc-gold-silver project. It also holds a royalty portfolio of five exploration-stage projects, the principal royalty being the Hemlo Annex property owned by Barrick Gold.
These will be added to Palladium One’s existing portfolio that includes three district-scale projects: the Tyko nickel-copper-cobalt project in Ontario, the CanAlask nickel-copper project in Yukon, and the KS nickel-copper-PGE (platinum group elements) project in Finland.
“This transaction advances our strategy of creating value by responsibly establishing a partnership with a senior producer and growing a portfolio of critical mineral assets in Canada in support of North American critical mineral supply chains, and it also increases liquidity,” Palladium One CEO Derrick Weyrauch said in a media release.
“Like MetalCorp, Palladium One has an excellent suite of properties including gold, PGEs, copper-nickel and a strong cash position. Based on the TSXV closing prices of each company on the day the agreement was signed, this transaction reflects a 28% premium for MetalCorp shareholders,” MetalCorp’s CEO Donald Sheldon added.
Following the announcement, MetalCorp’s stock jumped 50% to trade at C$0.025 on the TSX Venture Exchange by 1:15 p.m. Monday, placing its market value at just over C$3 million. Shares of Palladium One stayed flat with a market capitalization of C$22.8 million ($16.7m).
