San Gold merger complete

San Gold (SGR-V) has completed its merger with Gold City Industries (GC-V) and the merged company will continue under the San Gold name.

Under the terms of the merger, approved by both companies’ shareholders, shares of the former San Gold Resources were traded directly for shares in San Gold, and 1.93 shares of Gold City were traded for one share in San Gold.

The merger consolidates the Rice Lake joint venture, which had been held 50/50 by Gold City and San Gold Resources. San Gold plans to reactivate the San Antonio mill at Bissett, Man., which it acquired when Harmony Gold Mining (hmy-n) divested the project in March 2004.

San Gold’s 2005 budget amounts to $10 million, to be spent in equal amounts on reactivating San Antonio, on developing the adjoining San Gold No. 1 deposit, and on exploration in the Rice Lake belt. The merged company has about $1.9 million in cash and receivables, based on first-quarter financial statements from the two predecessor companies, but warrants and options would bring in another $15.9 million if all were exercised.

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