Vancouver — Ruddock Creek joint-venture partners Doublestar Resources (DSR-V, DOUBF-O) and Selkirk Metals (SLK-V, SKRKF-O) intend to merge in order to fast-track development of the zinc-lead deposit, located about 100 km north-northwest of Revelstoke, in southeastern British Columbia.
The companies have signed a binding letter of intent for the merger, which would create a single company with about $14 million in current assets and a large base metal property portfolio in the province.
The plan would see each Doublestar common share exchanged for half a Selkirk share; all outstanding warrants and stock options would also be exchanged, based on the share ratio.
Selkirk’s president Gordon Keevil described the transaction as “financially positive” to his company, adding that consolidating the companies’ interests in Ruddock Creek would put Selkirk in a “much stronger position to advance its exploration and ultimate development.”
In the joint press release, Doublestar CEO Alan Savage said the company’s board supported the proposal.
“This transaction can effect enhanced shareholder value for both companies by placing the world-class potential of the Ruddock Creek zinc-lead deposit under one roof.”
Drafting of a definitive agreement is expected by the end of March with the transaction expected to close by late June, subject to regulatory and shareholder approvals.
Ruddock Creek is a sedimentary exhalative (sedex-type) deposit of stratabound zinc-lead mineralization hosted in calc-silicate rocks. The main mineralized zone (E-zone), which has undergone a significant amount of past exploration, is a massive sulphide lens up to 46 metres thick.
Drilling has traced E-zone mineralization over a strike length of about 250 metres and across 200 metres of width. Based on the most recent drill results, the zone shows more than 400 metres of downdip continuity from its surface expression.
Stepout drilling to test the western extension of mineralization has encountered significant zinc and lead grades.
Doublestar holds a 30% interest in Ruddock Creek, with Selkirk holding 70%.
Shares of Doublestar jumped 39% on news of the merger plan to close up 11 at 39 apiece, while Selkirk closed the day even at 86 per share.
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