US gold juniors plan three-way merger

Vancouver — The merger of three companies — Romarco Minerals (R-V), Western Goldfields (WGDF-O) and U.S. Gold (USGL-O) — will result in a prospective mid-tier gold producer with a significant portfolio of properties.

Under an agreement, the new company will be held by shareholders of the predecessor companies on the basis of 20% by Romarco, 42% by Western Goldfields, and 38% by U.S. Gold.

Romarco, the surviving entity, will issue new shares for the other two companies and maintain a listing on the TSX Venture Exchange.

Romarco President and CEO Diane Garrett will become CEO of the new company, with Western Goldfields President and CEO Thomas Mancuso assuming the role of president.

The new company expects that, within 18 months, two mines will be producing a total of 150,000 oz. gold per year.

Western Goldfields’ Mesquite mine, in southern California, currently produces limited amounts of gold annually from residual leaching of 138 million tonnes of ore on the heaps. The open-pit mine, acquired from Newmont Mining (NEM-N) in late-2003, operated from 1986 to 2001 and has produced more than 3 million oz. gold (T.N.M., March 4-10/05). Four fully permitted extensions to the existing pits contain about 38.3 million tonnes of in situ mineralized material grading 0.6 gram gold per tonne, or 740,000 oz. gold.

The primary asset U.S. Gold brings to the table is its Tonkin Springs gold project, in Nevada’s Cortez trend. The deposit contains 26.5 million tonnes of mineralized material grading 1.2 grams gold (1 million oz. gold contained) and includes an existing 1,500-tonne-per-day mill facility. Tonkin Springs operated from 1985 to 1988 and again in 1990.

Having held an interest in Tonkin Springs since the mid-1980s, U.S. Gold recently regained full title, following joint-venture partner BacTech Mining‘s (BM-V) pullout from the project after failing to fund the reclamation bond in full.

Romarco holds several gold exploration projects, including Buckskin National, Roberts Mountain and Pine Grove in Nevada, and Cori Puncho in Peru.

In addition to its Canadian listing, the new company plans to seek a senior listing in the U.S.