In breaking news Monday, Detour Gold Corporation (TSX: T.DGC, Stock Forum) and PDX Resources (TSX: T.PLG, Stock Forum) announced that they have entered into an agreement to merge the companies.
PDX is Detour Gold's largest shareholder, with an approximately 42% interest in the company.
According to the companies, each PDX share will be exchanged for 0.2571 of a common share of Detour Gold, representing a value of $2.12 per PDX share based upon the closing price of Detour Gold shares on the TSX on January 23.
Also, 19 million common shares of Detour Gold will be issued to PDX shareholders. PDX will become a wholly-owned subsidiary of Detour Gold and the shares of Detour Gold currently held by PDX will be cancelled.
"We are delighted by this opportunity to move forward on the Detour Lake project under a broader investor base and assisted by a respected and experienced board of directors. It's a compelling combination of project and people," said Gerald Panneton, president and chief executive officer of Detour Gold.
After the transaction is completed, Gerald Panneton will continue to serve as the president and chief executive officer of Detour Gold and Michael Kenyon, a current director of Detour Gold, will assume the role of executive chairman.
Detour Gold’s focus is to advance the development of its Detour Lake project in northeastern Ontario.
On the PDX resources Bullboard Monday, orgprophet said: “Sensible no brainer ... as was the pruchase of this company basedupon its DGC's holdings ... congrats to everyone who played thearbitrage play to perfection. The only sad part is I wasn't able to raise more capital soon enough to fully take advantage of this move ... upside is there is no doubt we are going where the gold in the DGC mines will take us ... all of us gold bugs no where that is![sic]”
Shares of Detour Gold were up 5.9% to $8.75 while PDX climbed 26.7% to $2.09 Monday.
