On April 16, McEwen Mining Inc. was one of the companies to come into the news cycle in a big way following a key announcement. The company announced yesterday that it had gone into a definitive agreement by way of which it would acquire all the issued and outstanding shares in Timberline Resources Corporation (OTC:TLRS) through a merger between the two. The merger would be a particularly important milestone for McEwen Mining since it would further strengthen its existing exploration and development portfolio projects in the state of Nevada.
As per the provisions of the agreement, shareholders of Timberland Resources would receive 0.01 of a share in McEwen Mining for each share of Timberland they held. That would represent a value of $1.02 per Timberland share as per the 20-day volume-weighted average trading price of McEwen Mining shares on the New York Stock Exchange at the close of business on April 15, 2024.
The valuation represented a premium of as much as 132% on the 20-day volume-weighted average price of the Timberland share on the OTCQB. Prior to the signing of the agreement, McEwen Mining owned a 6.25 million common share of Timberland, which represented 3.3% of the basic outstanding shares to go along with 6.25 million Timberland warrants.
Other than the existing ownership, McEwen Mining would issue around 1.84 million shares following the closure of the transaction valued at $18.8 million. It was also noted that the transaction would be closed once the customary closing conditions were met, which would include the award of the relevant stock exchange and regulatory approvals. The Timberland shareholders, who hold the majority of the outstanding shares, would also need to provide their approval for the same. The directors of Timberland had unanimously recommended that the shareholders vote in favor of the merger.
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