The Vancouver-based junior explorers Outcrop Silver & Gold Corp. (TSX-V: OCG) (OTCQX: OCGSF) and Zacapa Resources Ltd. (TSX-V: ZACA) (OTCQB: ZACAF) are amalgamating to create a more well-funded company with reduced operating expenses.
The companies announced the amalgamation agreement on Thursday, which will result in Zacapa owning approximately 12 per cent of Outcrop’s shares. They say it will provide Zacapa with the opportunity to hold shares in a larger and more diversified company, which will enable it to develop its properties more efficiently.
“A wholly-owned subsidiary of Outcrop will amalgamate with Zacapa and all of the issued and outstanding common shares of Zacapa following the amalgamation will immediately be exchanged for common shares of Outcrop on a four-for-one basis,” the companies say. The transaction still needs certain regulatory permissions and approval from the TSX Venture Exchange.
Outcrop has a series of four silver, gold and copper projects throughout Colombia. Zacapa is currently engaged with three gold projects in Nevada and Idaho and one copper operation in Arizona.
Outcrop shares dropped by 13.16 per cent Thursday to $0.16 on the TSX Venture Exchange and have been on a steady decline since January 1, dropping by 50 per cent. Zacapa stock stayed flat at $0.035 and has dropped by over 68 per cent since the beginning of this year.
Zacapa received approval for its 3,000-metre drill program at the South Bullfrog gold project in Nevada from the United States Bureau of Land Management in February. The company says the Beatty District where the project is situated is estimated to have 8.6 million ounces of gold.
In May, Canada’s Fraser Institute ranked Nevada as the world’s number-one mining jurisdiction to invest in.
NevGold Corp. (TSX-V: NAU) (OTCQX: NAUFF) is another junior explorer making significant progress with mining operations in Nevada. The company recently discovered new and untested areas of its Limousine Butte Project in White Pine County.
During last year’s drill program, NevGold intercepted a high-grade result of 2.19 g/t of oxide gold over 61.6 metres including a rich interval of 8.51 g/t Au over 11.6 metres at the site’s Resurrection Ridge section.
“There are a number of new, high-priority targets that are focused on expanding the mineralized areas at Resurrection Ridge and Cadillac Valley, and finding new areas of mineralization within the larger project boundary,” said NevGold’s CEO Brandon Bonifacio last month.
Well-established Toronto Stock Exchange-listed mining companies have chosen to invest in NevGold in recent days. McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) is one of the company’s investors, holding a 7 per cent share, as well as GoldMining Inc. (TSX: GOLD) (NYSE: GLDG), which currently holds a 22 per cent stake in the company.
As of June 30, NevGold had a cash balance of $1 million and a market capitalization of $27.9 million.
NevGold shares rose by 3.1 per cent Thursday to $0.33 on the TSX Venture Exchange.
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