Moneta Gold (TSX: ME; OTCQX: MEAUF; FSE: MOPA) and Nighthawk Gold (TSX: NHK; OTCQX: MIMZF) are planning a merger of the companies. Moneta will acquire all of the common shares of Nighthawk in exchange for common shares of Moneta. The combined company, referred to as MergeCo for the time being, will be one of the leading gold developers in Canada.
Moneta’s flagship property is its 100% owned Tower Gold Project near Timmins, Ontario. The Preliminary Economic Assessment (PEA), completed in September 2022, outlined a combined open pit and underground mine with a 7 million tonne per annum conventional leach operation over a 24-year mine life. Approximately 4.6 million ounces of gold will be recovered, generating an after-tax net present value (NPV) of C$1.07 billion at a 5% discount, an after-tax internal rate of return (IRR) of 31.7% and a payback period of 2.6 years at a gold price of $1,600/oz.
The Tower project contains a total of 12.8 million ounces of gold. There are 149.8 million indicated tonnes grading 0.90 g/t gold (4.3 million contained ounces) recoverable by open pit methods and 802,000 indicated tonnes grading 4.67 g/t gold (122,000 contained ounces) recoverable by underground methods. The Inferred resource is 235.6 million tonnes grading 1.09 g/t gold (8.3 million contained ounces), of which approximately 95% is amenable to open pit mining.
Nighthawk’s properties are located north of Yellowknife, NWT. The flagship property is the historic Colomac gold project. The August 2023 PEA demonstrated the project’s potential for 290,000 ounces per year over an 11.2 year mine life. The project could generate an NPV of C$1.2 billion at a 5% discount and an after-tax IRR of 35% based on a gold price assumption of $1,600/oz.
Several deposits suitable for either open pit or underground mining have been identified at Colomac, containing a total of almost 5.1 million ounces of gold. The deposits total 70,432 indicated tonnes grading 1.50 g/t gold (3.4 million contained ounces) and 24,434 inferred tonnes grading 2.17 g/t gold (1.7 million contained ounces).
The merger agreement provides that each Nighthawk shareholder will receive 0.42 of a Monita share for each Nighthawk share held. Existing Nighthawk and Monita shareholders will own approximately 34% and 66% respectively of MergeCo.
In connection with the transaction, Nighthawk has entered into an agreement with a syndicate of underwriters led by SCP Resource Finance LP. They will purchase approximately 36.8 million Nighthawk subscription receipts at a price of C$0.34 per subscription receipt on a bought deal basis. The gross proceeds of C$12.5 million will be used by MergeCo to fund the advancement of the Tower and Colomac gold projects, for working capital and for general corporate purposes.
The board of directors of MergeCo will consist of seven directors, four from Moneta and three from Nighthawk. The new company will be led by non-executive Chairman Josef Vejvoda (Moneta) and President and CEO Keyvab Salehi (Nighthawk).
