The planned merger of Mutual Resources (TSE) and Golden Knight Resources (TSE) will result in the formation of a single company with 15 million shares outstanding, $25 million in working capital, no debt and annual production of about 42,000 oz. of gold.
Mutual shareholders will receive one Golden Knight share for every seven shares held, plus one share purchase warrant for every four shares of Golden Knight received under the offer. The warrants are exercisable at $12 for a period of 18 months.
The merger provides Golden Knight with access to projects in West Africa and gives Mutual the financial strength of a production base. Golden Knight derives its gold production from a 40% interest in the Casa Berardi mine in Quebec.
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