More on Lucky Strike deal, from Stockwatch today Collin Kettell and Denis Laviolette's New Found Gold Corp. (NFG) added three cents to $4.53 on 165,000 shares. The company, a busy beaver in Newfoundland for the past three years, is rolling its Lucky Strike gold project in Ontario into a soon-to-be remodelled Warrior Gold Inc. (WAR: $0.045). Warrior's president and chief executive officer, Daniele Spethmann, will consolidate her company's stock 1:4, reducing it to 30 million shares, and will then issue 28.6 million shares to New Found Gold for Lucky Strike.
Warrior would then be called Kirkland Lake Discoveries Inc., with Ms. Spethmann remaining in the corner office and with Mr. Laviolette just down the hall in the chairman's digs. Gary Nassif and Stephen Burleton, two Warrior directors, will stay on and join Ms. Spethmann and Mr. Laviolette in the boardroom, while New Found will appoint two additional directors later.
Ms. Spethmann applauded the arrangement as the consolidation of a highly prospective land package in a renowned mining district, one that offers a "rare and exciting opportunity." The 11,400-hectare Lucky Strike property is immediately east of Warrior's existing 25,000 hectares of ground in the Kirkland Lake area, and combined, Ms. Spethmann enthuses, the properties host "approximately 60 kilometres of major, first-order and second-order mineralized structures" along with four old gold mines and many showings of precious and base metals.
Mr. Laviolette, New Found's founder and president, cheers the combination as a district-scale project "creating excellent conditions for new discoveries." Accordingly, he is "excited by the prospect of this agreement" and is "motivated to redefine the geological paradigm of the region." And so, he and his new crew will be eager to "undertake a rigorous exploration program demonstrating the true potential of this region."
To get the paradigm rolling with the needed rigour, Mr. Laviolette and Ms. Spethmann will need to cash up the company's treasury. They say that Kirkland Lake Discoveries will be completing a private placement designed to raise "not less than $10-million" through the sale of regular and flow-through shares. The price will be determined in the context of the market, they say -- but are quick to offer some premarket context: They suggest Kirkland Lake Gold will have a value of about $20-million before the placement, which would work out to about 34 cents per consolidated share.