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Austral Gold edges closer to merger with Argentex Mining

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Austral Gold (ASX:AGD) is edging closer to a merger with Toronto listed Argentex Mining Corporation (TSX-V:ATX) after the signing of a definitive agreement.

This paves the way for Argentex to seek the approval of its shareholders for the deal first announced in August 2015.

Austral Gold will offer 0.5651 shares for every ordinary share of Argentex that it does not own valuing the Argentinian exploration company at about C$5.8 million.

The transaction would seem a neat fit with operations and development projects in the Americas and access to existing cash flow from Austral's low cost Guanaco mine in Chile.

Argentex's main asset is the Pingüino Silver-Gold project in the Santa Cruz Province of Argentina and includes 26.7 million silver-equivalent-ounces in the indicated category at grades of 103.4 g/t silver and 0.58 g/t gold.

While Austral Gold brings local technical and corporate experience and an operating gold mine with current positive free cash flow and will seek to list its ordinary shares for trading on the TSX Venture Exchange.

Quarterly cash flow from its operations was US$2.9 million. Cash and cash equivalents reached US$10 million at year end.

Current share price is $0.15.

The merger is subject to shareholder and various other statutory approvals.

 

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Quick facts: Austral Gold Limited

Price: 0.23 AUD

ASX:AGD
Market: ASX
Market Cap: $130.2 m
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