Gleichen Resources (GRL-V) likes what it sees at the Morelos gold project and Mexico, and now it is set to take it all for itself.
The Toronto-based company announced it will take a full interest in Minera Media Luna (MML) by buying Goldcorp’s (G-T, GG-N) 21.2% stake in the project for $52 million in cash.
Gleichen currently holds the other 78.8% of MML, which in turn has a 100% stake in Morelos.
The acquisition is expected to close on February 26, 2010
It is a bold move by the junior which only took its first stake in Morelos late last year by submitting the winning bid to Teck (TCK.B-T, TCK.A-T, TCK-N) – the former holder of the property.
Gleichen acquired that 78.8% stake in August by paying Teck US$150 million and giving it a 4.9% stake in Gleichen.
Its ability to make such capital intensive moves has come from its success in winning Bay Street’s backing.
A week after releasing an initial National Instrument 43-101 resource estimate for the project in October of last year, Gleichen announced a private placement that raised over $200 million for its coffers.
While that funding took care of the initial US$150 million investment, the company had to turn back to the market for the latest acquisition.
As with the first private placement, Macquarie Capital Markets Canada served as the lead agent. This time around Gleichen raised $50 million by issuing 50 million common shares at $1.00 per share.
The offering is expected to close by the end of the month, and will add to the 288 million shares the company currently has outstanding.
Morelos sits 180-km southwest of Mexico City and is made up of a group of 7 claims, covering roughly 30 sq. km. Gold was first discovered in the area in the 1990s.
The project currently has an open pittable measured and indicated resource of 28.8 million tonnes grading 3.2 grams gold for 2.97 million oz. and an inferred resource of 8.7 million tonnes grading 3.2 grams gold for 890,000 oz.
Gleichen – which is set to change its name to Torex Gold Resources – saw its shares trade flat at $1.00 in Toronto on Feb. 10.
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