MiningGold & silver
Ashanti Gold Corp.

Ashanti Gold expects to close Desert Gold deal by end of May

Last month (March), the group said it had signed a letter of intent on the sale, which is a stock deal valued at C$3.8 million

Gold bars on dollar bills
The companies have now signed the definitive combination agreement

Ashanti Gold Corp (CVE:AGZ) (OTCMKTS:GULSF) told investors that its sale to Desert Gold Ventures Inc (CVE:DAU) is expected to close by the end of May 2019.

Last month (March), the group said it had signed a letter of intent on the sale, which is a stock deal valued at C$3.8 million. It sees Desert Gold acquiring all of the issued and outstanding shares of Ashanti.

READ: Ashanti signs letter of intent on C$3.8M sale to Desert Gold

The companies have now entered a definitive combination agreement, which sees the consolidation of adjacent property rights and holdings in a prospective area of Mali.

"... both teams are moving forward to close this transaction and continue onward to develop the combined, bigger, land package of both companies," said Tim McCutcheon, Ashanti’s CEO.

"This bigger land package encompasses major geological structures in the area, similar to other structures that have given the industry multiple large gold deposits.

"Since the Letter of Intent was announced, investor interest has been high and we look forward to creating value for Ashanti and Desert Gold shareholders through the completion of the business combination."

A 28.5% premium

Under the terms, Ashanti Shares will be exchanged on the basis of 0.2857 Desert Gold share. The deal implies consideration of C$0.0514 per Ashanti share, based on Desert Gold’s closing price on the Toronto Venture Stock Exchange on March 8, representing a premium of 28.5%.

Ashanti says the deal offers its shareholders increased exposure to combined properties’ overlying regional-scale structures, which are related to numerous, multi-million-ounce deposits.

Ashanti shareholders have been recommended by the board to vote for the amalgamation, which will take place at a special meeting of shareholders with closing expected to take place by the end of May 2019.

Contact Giles at [email protected]

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Quick facts: Ashanti Gold Corp.

Price: $0.05

Market: TSX-V
Market Cap: $3.32 m

2 min read