Proxy advisory firms greenlight Integra-Millennial merger

Two independent proxy advisory firms have thrown their weight behind the proposed at-market merger of Integra Resources (TSXV: ITR) and Millennial Precious Metals (TSXV: MPM), concluding Friday the deal represents an “attractive opportunity.”

Institutional Investor Services published an analysis finding the transaction makes strategic sense. Under a Feb. 27 offer, Millennial shareholders will receive 0.23 Integra share for each Millennial share held, implying a valuation of $0.18 per Millennial share (the stock was trading at 17¢ mid-day on Feb. 27). Existing shareholders of Integra and Millennial would own about 65% and 35%, respectively, of the Integra share float on closing.

The combined company would boast one of the largest gold-silver endowments in the Great Basin of Nevada, Utah and parts of Oregon and Idaho, not controlled by a major mining company.

ISS argues the business combination will provide Millennial shareholders with the opportunity to continue to hold their investment in the assets of the company and participate as shareholders of the purchaser in a more extensive and more diversified company.

ISS recommends that Millennial shareholders vote for the arrangement resolution during the special shareholder meeting on Apr. 26.

Glass Lewis, a proxy advisor to institutional investors covering 30,000 shareholder meetings yearly, also supports the merger.

Integra is focused on restarting the DeLamar gold-silver project in Idaho, which it acquired in late 2017. The project comprises the adjacent DeLamar and Florida Mountain gold-silver deposits, which together hold 474,000 oz. oxide gold and 20.8 million oz. silver in measured and indicated resources (44 million tonnes grading 0.33 grams gold per tonne and 14.6 grams silver).

Millennial is expanding its eight gold and silver projects in Nevada and Arizona. The company plans to accelerate the development of its two flagship projects in Nevada: Wildcat and Mountain View.

The Wildcat project contains an inferred resource of 776,000 oz. oxide gold (60.8 million tonnes at 0.40 grams gold per tonne), while the Mountain View project has an inferred resource of 427,000 oz. gold (23.2 million tonnes at 0.57 grams per tonne).

In addition to the development pipeline, substantial exploration potential exists in the BlackSheep, War Eagle and non-oxide targets at DeLamar, and the Dune, Eden, Marr, Ocelot, Cerro Colorado and Red Canyon projects from Millennial, according to Integra.

As part of the merger, the companies have also welcomed Wheaton Precious Metals (TSX, NYSE; LSE: WPM) as a shareholder through $35 million in equity financings. Wheaton has agreed to invest an amount equal to up to 9.9% of the issued and outstanding Integra shares. The equity financing also includes participation by Beedie Investments, an existing lender and shareholder of Integra.

Integra last closed flat at 75¢, giving it a market capitalization of $59.8 million. Millennial share closed at 17.5¢ on Friday, giving it a market cap of $31.6 million.