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Serengeti Resources to acquire Sun Metals in BC mining deal

BC gold-copper merger

Two B.C.-based junior exploration companies are combining forces on copper-gold projects in B.C.

Serengeti Resources Inc. will acquire Sun Metals Corp. and its Stardust copper-gold property northeast of Smithers.

Following the merger, Mark O’Dea, chairman and founder of Oxygen Capital, which owns Sun Metals and three other companies, will become executive chairman of the newly merged company.

Under the deal, Sun Metal shares will be acquired by Serengeti on a 0.43 basis. It will create a company with a market cap of about $70 million.

“Technically, Serengeti is acquiring Sun Metals for a modest premium, but the deal is being put together as a merger,” O’Dea told Glacier Media. “So we’re splitting the board three and three.”

Serengeti owns the Kwanika property, which is about six kilometres from Sun Metals’ Stardust property.

The Kwanika property has high tonnage and Stardust has high grades, O'Dea said. He said estimates for Stardust is an average grade of copper-gold equivalent of three per cent.

“When you look at the synergies between the two, they’re really compelling,” O’Dea said. “Point three per cent copper is a typical type grade, and the types of grades we’re pulling our of Stardust in central B.C. are an order of magnitude higher grade than that.

“Combining that with the bigger tonnes – much bigger tonnes, well-defined tonnes – of the Kwanika deposit, you end up with a really exciting combined project.”

Stardust is still in early exploration stage while Kwanika is more advanced. Serengeti and Sun Metals also own other properties 40 km north.

“These two properties tie onto one another – so they’re connected -- so there’s another centre of gravity of synergy up there. There’s lots of industrial logic to this deal.”



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