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American Creek Resources (TSXV: AMK) has firmed up its proposed sale to privately held Cunningham Mining Ltd. in an arm’s-length, all-cash deal valued at C$207 million ($152 million) with the signing of a definitive agreement dated September 5.
In early June, the parties entered into a letter of intent for the transaction, under which the British Columbia-based Cunningham would acquire American Creek’s shares at a significant premium (approximately 274% at the time of signing) of C$0.43 apiece.
“We believe this proposed transaction may provide not only a liquidity event for our longstanding shareholders, but also represents an opportunity for shareholders to potentially realize a 250% plus premium to the present market valuation of their equity in the company,” American Creek’s CEO Darren Blaney stated in the June 6 news release.
Compared to the last closing price before the definitive agreement, the consideration still represented a premium of approximately 153%. By market close on Friday, American Creek’s shares had shot up 81.6% to C$0.34 for a market capitalization of C$155 million ($114 million).
The proposed sale also has the endorsement of Canadian mining billionaire Eric Sprott, who, as American Creek’s largest shareholder (15.5% stake), has pledged to vote in favour of the transaction.
American Creek’s main asset is a 20% fully carried interest in the Treaty Creek project located in BC’s Golden Triangle. Tudor Gold (TSXV: TUD) is the project’s majority owner (60%) and operator, while Teuton Resources (TSXV: TUO) owns the remaining 20%.
The Treaty Creek property covers 179.2 sq. km. within an area known to host world-class porphyry gold-copper deposits. It borders Seabridge Gold’s KSM — considered the world’s largest undeveloped gold project — to the southwest, and Newcrest’s Brucejack mine to the south. The past-producing Eskay Creek mine also lies 12 km to the west.
The current area of focus at Treaty Creek is on the Goldstorm deposit, which contains an estimated 27.9 million oz. of gold equivalent at a grade of 1.19 grams per tonne in the indicated resource category, plus 6 million oz. grading 1.25 g/t in the inferred category.
In addition to Goldstorm, the property also includes many additional zones — Eureka, Calm Before the Storm (CBS) and Perfectstorm — that are considered to be early-stage or advanced-stage exploration targets.
Headquartered in Vancouver, Cunningham aims to finance its mining projects in BC through the issuance of digital tokens, which would allow investors to be co-owners of projects. It recently acquired a group of the placer claims known as the Nugget Trap, covering 2.3 sq. km of the Golden Triangle.
According to Cunningham, the Nugget Trap mine had demonstrated gold concentrations of 25 g/t during assay testing, while high concentrations of silver were also present. Deep mining is unnecessary for high concentration recovery on the Nugget Trap project, making it ideal for operational profitability, the company stated on its website.
To fund its acquisition of American Creek, Cunningham announced last month it has entered into a token subscription facility of up to $153 million for a 36-month term following a centralized exchange listing of its mining tokens.
