On April 12, Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE) announced that it had entered into an agreement to purchase Battle Mountain Gold Inc. (BMG:TSX.V; BMTNF:OTCPK). According to the company, "Gold Standard has agreed to acquire all of the issued and outstanding common shares of Battle Mountain for consideration of 0.1891 of a common share of Gold Standard plus $0.08 in cash for each Battle Mountain common share held. . .the arrangement values Battle Mountain at approximately C$0.59 per share, representing a premium of approximately 47% to the closing price of Battle Mountain."
According to the company, this acquisition:
- Enhances Gold Standard's leading position in Nevada, one of the world's most prolific gold producing regions.
- Provides Gold Standard with district scale property positions on both the Carlin Trend and Battle Mountain Trend, the most productive gold trends in Nevada.
- Adds additional growth potential through the Lewis gold project to Gold Standard's portfolio of Nevada assets.
President and CEO of Gold Standard Ventures Jonathan Awde stated, "We believe this transaction creates excellent value for the shareholders of both Gold Standard and Battle Mountain. We see an opportunity to increase our upside by adding a high quality under explored asset where we have proven expertise. "
Chet Idziszek, president and CEO of Battle Mountain, pointed out that "this transaction represents a significant premium for our shareholders, and allows us to gain exposure to Gold Standard's large and highly prospective exploration and development portfolio in Nevada, robust treasury, strong shareholder base, and experienced team."
In his April 12 report, PI Financial Analyst Brian Szeto notes that "Battle Mountain's flagship project is the Lewis gold project located in Nevada, United States. Although it is an early stage exploration project without a resource, we highlight that it is directly adjacent to Newmont's Phoenix open pit mine that has annual production of approximately 209,000 ounces of gold and 42 million pounds of copper."
Szeto views the transaction "positively as Gold Standard now has two projects located in two of Nevada's most prolific gold trends (the Carlin Trend and the Battle Mountain Trend). In addition it now also has two projects that are directly adjacent to two of Newmont's operating mines in Nevada (Phoenix and Emigrant/Rain) thus increasing the likelihood of Gold Standard being a takeout candidate itself down the road." He concludes by "maintaining our buy recommendation and speculative risk rating" and a target price of $3.70/share.
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1) Melissa Farley compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Gold Standard Ventures Corp. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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Disclosures from PI Financial, Gold Standard Ventures Corp. Corporate Update, April 12, 2017
Analyst Certification: I, Brian Szeto, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this report. I am the research analyst primarily responsible for preparing this report.
Analysts are compensated through a combined base salary and bonus payout system. The bonus payout is amongst other factors determined by revenue generated directly or indirectly from various departments including Investment Banking. Evaluation is largely on an activity-based system that includes some of the following criteria: reports generated, timeliness, performance of recommendations, knowledge of industry, quality of research and investment guidance, and client feedback. Analysts and all other Research staff are not directly compensated for specific Investment Banking transactions.
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