Dia Bras Exploration (DIB-V) plans to join forces with fellow Mexico-focused explorer Exmin Resources (EXM-V) in a friendly all-share deal worth $2.75 million.
The two companies have agreed that Dia Bras will acquire all of the outstanding shares of Exmin. They will use an exchange ratio of 0.2209 Dia Bras shares for each Exmin share.
The deal is a 17.8% premium to Exmin shareholders based on the 15-day volume-weighted average of both companies’ share price on July 16 and a 32.5% premium over the closing price of Exmin shares on July 16.
When the deal is complete Exmin shareholders will hold 7% of Dia Bras shares.
Merging will allow Dia Bras to hold more land near its Bolivar copper zinc project in the Sierra Madre gold belt in Chihuahua state, Mexico.
“This transaction allows Dia Bras to add significant gold potential to its property portfolio as well as expanding the company’s control of the Boilvar district,” said Dia Bras president and CEO, Daniel Tellechea, in a statement.
Dia Bras has been exploring at Bolivar while simultaneously running an ongoing pilot mining program. The company ships ore to its 850-tonne-per-day Malpaso mill, about 150 km away, by truck.
Exmin has gold and base metals exploration projects in the same area including the Reyna de Oro project, which includes a 25% indirect interest in the Reyna de Oro mine and an option to acquire the remaining 75%, and the and Batopilas project.
“The combined company will create an exploration division that has the ability to finance projects through development to production,” said Exmin president and CEO, Karl J. Boltz, in a statement.
Dia Bras shares were down 17% in the first hour of trading today, or 2, to 10 apiece on a trading volume of 20,000 shares. Dia Bras has 167.3 million shares outstanding.
Exmin shares were unchanged at 2 apiece with a trading volume of 121,000 shares. Exmin has 104 million shares outstanding.
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