Miramar plans Talapoosa takeover

A new suitor has turned up for the Talapoosa heap-leach gold-silver property in Lyon Cty., Nev.

Miramar Mining (TSE) plans to acquire Talapoosa through a merger with the property’s owner, Athena Gold (VSE).

The board of directors for both companies approved the plan of arrangement, which will give each Athena shareholder one free-trading share of Miramar for each 2.8 shares of Athena. Athena plans to call a meeting of shareholders to vote on the proposal.

Based on Miramar’s recent share price of $5.50, the deal is worth almost $2 per Athena share, or about double the issue’s pre-announcement trading level. Both Placer Dome and, more recently, Pegasus Gold have entered separate property agreements on Talapoosa. Each major dropped the property before earning an interest, although they did complete a significant amount of work beforehand.

Pegasus estimated Talapoosa’s mineral resource at about 50.1 million tons grading 0.026 oz. gold and 0.35 oz. silver per ton based on a cutoff of 0.01 oz. gold.

Much of the resource is unoxidized, and metallurgical work completed by Pegasus projected maximum gold recoveries of 78% for oxide material and 60% for sulphides. Maximum silver recoveries were estimated at 55% for oxides and 50% for sulphides.

Stephen Quin, vice-president of Miramar, said the company has already completed a review of the property data and that Pegasus’ numbers have been confirmed.

After the acquisition is complete, Miramar plans to continue with the permitting process at Talapoosa, as well as fund an independent feasibility study.