Moneta and Nighthawk gold developers to merge

Nighthawk Gold and Moneta Gold have agreed to a C$169 million at-market merger to create a Canadian gold development company.

Under the transaction, Nighthawk shareholders will receive 0.42 of a Moneta share for each Nighthawk share, with Nighthawk and Moneta shareholders owning 34% and 66% of the resulting company, respectively.

Investors have been calling for consolidation in the sector. "There are too many companies and not enough people investing in the sector, so there needs to be consolidation," Michael Grey, partner at Agentis Capital told Mining Journal.

The resulting company, whose name has yet to be determined, will control indicated resources of 7.8Moz with another 10Moz in inferred resources, with two projects with preliminary economic assessments (PEA).

Moneta's Tower project in Ontario, Canada, has a PEA outlining the production of 261,000ozpa over the first 11 operating years, with a 32% after-tax internal rate of return at US$1,600/oz gold price. Nighthawk's Colomac in Northwest Territories, Canada PEA outlines an average potential production of 290,ozpa over its 11.2-year life of mine, with a 35% IRR, also at a US$1,600/oz gold price.

The companies believe many synergies can be achieved through rationalising management teams, marketing, seasonal workflow sequencing, and project-phased development.

The board will consist of seven directors, with four Moneta nominees and three Nighthawk nominees. Senior management will include Josef Vejvoda as non-executive chair and Keyvan Salehi as chief executive.

Nighthawk has entered into an agreement with SCP Resource Finance for a bought deal for 36.8 million subscription receipts priced at 34c each for proceeds of C$12.5 million, for the exploration and advancement of the Tower and Colomac gold projects.