Vancouver Romarco Minerals (R-V) and Western Goldfields (WGDF-O) have called off their proposed merger, which was initially floated as a three-way transaction also involving U.S. Gold (USGL-O). The idea was to create a mid-tier gold producer with a large property portfolio in Nevada and the western United States.
U.S. Gold was the first to bow out, but Romarco and Western Goldfields forged ahead and executed a merger agreement last fall. The parties recently terminated the merger process, resulting in Western paying Romarco US$1.95 million as a break-up free, and for other minor compensation.
Romarco says it was “initially optimistic about the potential of the combined company,” but after delays in the merger process and other circumstances, concluded the deal was not in the best interests of its shareholders. The company intends to use the break-fee compensation to explore various properties, including Buckskin-National, Pine Grove and Roberts Mountain in Nevada, and the Cori Puncho project in Peru.
Western Goldfields’ key asset is the Mesquite mine in southern California, a heap-leach operation that produces gold from residual leaching. The mine-life could be extended by mining mineralized material containing an estimated 740,000 oz. gold within permitted extensions of existing pits.
In early February, Western Goldfields appointed Randall Oliphant, former president of Barrick Gold (ABX-T, ABX-N), as its new chairman. Raymond Threlkeld, another senior Barrick executive, was appointed president and chief executive officer.
The company recently closed the initial US$3.7-million portion of a non-brokered private placement totaling US$6 million.
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