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Saturday, Apr 20, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


The Mugglehead technology roundup: merger and acquisition edition

Here are five companies playing the merger and acquisition game

Image from Nick Youngson on

Here are five companies playing the merger and acquisition game.

Heliostar Metals and Argonaut comes to terms on Aurea Mining acquisition

Argonaut Gold (TSX: AR) inked a binding purchasing agreement with Heliostar Metals (CSE: HSTR) to buy Aurea Mining on Monday.

Aurea is a subsidiary of Argonaut, which holds a 100 per cent indirect interest in the Ana Paula Gold Project. Heliostar also entered into an option agreement with Argonaut and its subsidiary, Compañía Minera Pitalla S.A. de CV, for 100 per cent interest in the San Antonio Gold Project. Both of these are in Mexico.

“Argonaut’s focus at this time is our cornerstone asset, the Magino mine in Ontario Canada that will transform the Company to a low-cost, intermediate producer.  This agreement allows Argonaut to potentially unlock value in two non-core Mexican assets and provides Argonaut with a very attractive upside for its shareholders,” said Larry Radford, president and CEO of Argonaut Gold.

Argonaut is a Canadian-based gold company involved in exploration, mine development and production of its primary assets in Mexico. These are the El Castillo mine and San Agustin, which form the El Castillo complex in Durango, Mexico. The company also is presently in the construction stage with its Magino project, as well as the advanced exploration stage in its Cerro del Gallo project.

Heliostar, in contrast, is a junior gold explorer with a portfolio of projects in Alaska and Mexico. The company’s flagship is the Unga Gold Project on Unga and Popof Islands in Alaska. The project hosts an intermediate sulfidation epithermal gold deposit on a district-scale property over 240 kilometers across the two islands.

Heliostar has full penetration into Mexico

Heliostar also owns three early stage epithermal projects in Sonora that are highly prospective for both silver and gold. Cumaro is in the El Picacho district while the Oso Negro and La Lola projects show strong potential for epithermal gold-silver mineralization.

The purchase agreement brings all the shares of Aurea Mining and by proxy, the title and permit to the Ana Paula Gold Project. In exchange, Argonaut gets a host of different items. These include a USD$10 million cash payment at closing, and another $2 million following the completion of a feasibility study, or July 1, 2024, whatever comes first.

Also, if the company gets an extension to the permits for the Ana Paul open-pit mine and gets a new underground mining permit, Heliostar gives over $5 million in shares divided by the volume weighted average closing price (VWAP) for the past ten trading days. Add to that an extra $3 million in cash when Heliostar announces a construction decision for the project, and another $2 million in optional cash or shares with the same VWAP conditions as before. Finally, when Heliostar actually starts commercial production, it pays Argonaut $5 million in cash and $3 million in cash or shares with the aforementioned VWAP conditions.

Irish Communications company Spearline focuses on user-experience with Callstat acquisition

Cork, Ireland based communication testing technology provider, Spearline, acquired Callstats analytics technology for WebRTC from 8×8 (NASDAQ:EGHT) for an undisclosed sum.

The acquisition will let Spearline use Callstats’ tech to provide software for testing and monitoring business telecommunications services for its clients. Spearline’s options give businesses the ability required to improve the customer’s experience. The deal adds to Spearline’s existing product suite, and comes directly after the company’s acquisition of Israeli-based communications software company testRTC in November of 2021.

WebRTC is an abbreviation of Web Real-Time Communication. It’s provides web browsers and mobile applications and real-time communication through application programming interfaces. It assists with audio and video integration inside webpages by allowing direct peer-to-peer communication. This eliminates the need for plugins or native apps.

What is 8×8?

The purpose is the development of RTC applications for the browser, mobile platforms and internet-of-things devices. This will allow them all to communicate using a shared set of protocols.

8×8 was founded in 1987 by Y.W. Sing and Chi-Shin Wang as Integrated Information Technologies. IIT started as a integrated circuit designer for the personal computer market during the late 1980’s. The name change to 8×8 came about in the mid-1990s as the company started servicing the video conferencing market.

Now it provides Voice over IP (VOIP) products, including cloud-based voice, contact centre, video, mobile and unified communications for businesses. It’s flagship project is the open-source VOIP program Jitsi, which its managed since 2018.

In contrast, Kevin Buckley and Matthew Lawlor founded Spearline in 2003. They have since grown the company to over 200 employees worldwide with offices in Ireland and India.

Read more: Calibre Mining high-grade gold drill positive results to continue at Panteon North, say analysts

Read more: Lam Research completes acquisition of semiconductor equipment distributor

Calibre Mining Fiore acquisition pays off in Nevada

Calibre Mining’s (TSX: CXB) earlier acquisition of Fiore Mining, closed in January, has paid off in terms of a successful drilling program for 2022 at its gold project at White Pine county, Nevada, in the Battle Mountain/Eureka gold trend.

Originally, the drilling program was to derisk the Gold Rock near-surface oxide project through exploratory and infill drilling, as well as structural modelling and geometallical classification. But during the program, the company intersected high-grade sulphide mineralization in areas that hadn’t been drill tested.

Drill program highlights:

  • 5.5 grams per tonne gold over 3.0 metres in hole GC22-008;
  • 7.1 grams per tonne gold over 2.1 metres in hole GC22-013;
  • 6.6 grams per tonne gold over 5.8 metres in hole GC22-015;
  • 4.1 grams per tonne gold over 8.1 metres in hole GC22-016;
  • 3.0 grams per tonne gold over 19.2 metres in hole GCM22-001;
  • 4.6 grams per tonne gold over 4.6 metres in hole GR22-006;
  • 6.7 grams per tonne gold over 3.0 metres in hole GR22-091;
  • 6.8 grams per tonne gold over 4.6 metres in hole GR22-102;
  • 5.5 grams per tonne gold over 3.0 metres in hole GR22-115;
  • 4.1 grams per tonne gold over 3.0 metres in hole GR22-151;
  • 3.2 grams per tonne gold over 43.8 metres, including 6.1 grams per tonne gold over 8.1 metres in hole GC22-018;
  • 5.3 grams per tonne gold over 3.0 metres in hole GR22-152;
  • 8.0 grams per tonne gold over 1.52 metres in hole GR22-041.

“These new results indicate there could be a large, untested Carlin-style mineral system at depth, thus we are shifting our focus to beyond the near-surface oxide deposits,” said Darren Hall, CEO of Calibre Mining.

Gamesquare Esports to merge with Engine Gaming

Gamesquare Esports (CSE: GSQ) and Engine Gaming and Media (TSXV: GAME) entered into an all-share deal to merge their businesses, where each share of Gamesquare will be exchanged for 0.08262 of a Engine Gaming share.

The new company connects Gamesquare’s content, advertiser and influencer portfolio with Engine’s data, analytics, advertising and marketing tech platforms. The end result is a end-to-end platform with reach across multiple entertainment verticals. These include e-sports, sports, influencer, publisher and advertising networks. The aim is broader brand penetration across multiple media options so companies can develop strategies to connect with youth audiences.

The ownership split in the combined company will be 60-40 with Gamesquare shareholders getting the larger piece. The new company will be Gamesquare Esports, but keep the GAME ticker on both the TSX and NASDAQ.

“As a combined organization, we will have an enhanced platform and expanded resources, including essential data and analytic solutions, to serve a broader base of global customers and accelerate growth,” said Justin Kenna, CEO of Gamesquare, and the proposed CEO of the combined company.

Acquisition offers large payoffs

In addition to Kenna, the combined company will include Lou Schwartz, who will be providing tech oversight as president. Also, key investors include Jerry Jones, the owner of the Dallas Cowboys, and John Goff, chairman and founder of Goff Capital. Representatives of the Jones family and Goff Capital will also sit on the board of the new company.

Additionally, Gamesquare and Engine combined have delivered over $70 million in revenue over a 12 month period. This reflects nearly double revenue over the same period the previous year. The transaction will likely improve the recurring revenue profile of the combined business. Management believes that the combination will provide an improved financial foundation for growth.

“The merger immediately expands our scale, which we expect will help us on an accelerated path to profitability in 2023, while creating an organization with a leading platform of end-to-end media, content and technology assets,” said Kenna. “Gamesquare and Engine Gaming have highly complementary core strengths, including broad product portfolios, and passionate team members committed to the gaming and e-sports markets.”

Crescent Point Energy picks up more Kaybob Duvernay assets for $375 million

Crescent Point Energy (TSX: CPG) (NYSE: CPG) announced it reached an agreement to purchase more of Kaybob Duvernay assets from Paramount Resources (TSX: POU) and increase its base dividend.

The Kaybob acquisition adds another 130 locations and increases drilling inventory in play to over 20 years. Also, the Q1 2023 dividend will increase by 25 per cent to $0.10 per share, or $0.40 per share annually. The company also anticipates extra cashflow to the tune of $1.25 billion in 2023, at US$80 WTI based on annual production of 138K to 142K barrels of oil a day (boe/d).

“Through this acquisition, we are increasing our drilling inventory in the play to over 20 years, based on current production. In addition, our land position will increase to approximately 400,000 net acres. We are also adding base production with an estimated net present value of approximately $200 million at current strip commodity prices,” said Craig Bryksa, president and CEO of Crescent Point.

The assets include 130 drilling locations across 65,000 net acres of crown land with 90 per cent average working interest. The assets produce over 4,000 boe/d and include various infrastructure points of interest, including a gas plant, pipelines, water infrastructure and seismic data.

Crescent Point intends on growing its Kaybob Duvernay asset from 35,000 boe/d to over 55,000 boe/d over five years.

“Through this acquisition, we are increasing our drilling inventory in the play to over 20 years, based on current production. In addition, our land position will increase to approximately 400,000 net acres,” said Bryksa.

Closing date for the acquisition is January 2023.


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