Benchmark Metals and Thesis Gold merge to create B.C. mining powerhouse

Jul 03, 2023

The companies will be consolidating their projects in the Toodoggone region

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The Vancouver exploration companies Benchmark Metals Inc. (TSX-V: BNCH) (OTCQX: BNCHF) and Thesis Gold Inc. (TSX-V: TAU) (OTCQX: THSGF) have inked a merger deal that will create one of the largest precious metals producers in northern British Columbia's Toodoggone mining district.

The companies announced the deal on Monday, which will consolidate the Lawyers gold-silver project owned by Benchmark and the Ranch gold-silver project held by Thesis.

Through the arrangement, Benchmark will be acquiring all issued and outstanding shares of Thesis and Benchmark will issue 2.55 of its shares to Thesis shareholders for each share they hold, implying a consideration of $0.96 per Thesis share and premium of 26.2 per cent. Upon conclusion of the transaction, Benchmark and Thesis shareholders will own 60 and 40 per cent of the combined company respectively.

The transaction is expected to enhance Benchmark's measured and indicated resources at the Lawyers project with high-grade near-surface mineralization at the Ranch project. Benchmark currently has approximately 3.14 million ounces of gold equivalent.

The companies plan to have a new resource estimate for the combined projects by the end of Q2 next year and are aiming to drill 50,000 metres to help accomplish that goal by the end of 2023.

Pres. Jim Greig joined @proactive_ca to discuss Benchmark signing an agreement to acquire @GoldThesis, positioning $BNCH as a top contender in Canada's #mining industry & potentially attracting the interest of major & mid-tier mining companies.

WATCH 👇 https://t.co/LdjNxnsRg1

— Benchmark Metals (TSX-V:BNCH.V)(OTCQX:BNCHF) (@MetalsBenchmark) June 5, 2023

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Once the deal has concluded, the combined company is expected to be well-financed with about $28 million in cash and cash equivalents. The new company will also be drafting an updated preliminary economic assessment (PEA) for the combined assets.

"For the new PEA, the combined company anticipates increased per year production, high-grade starter pits, rapid capital payback, materially improved net present value and internal rate of return and extended mine life," said Ewan Webster, President and CEO of Thesis.

"These milestones and timelines have been developed to unlock substantial value and solidify the potential of these two deposits into one world-class project," he added.

Webster will be the head manager of the combined company, maintaining his role as President and CEO.

"The merger of these companies establishes a leading precious metals development and exploration project in B.C. with a strong balance sheet, remarkable scale, significant growth potential, synergistic advantages, cost efficiencies, and, ultimately, the potential to deliver an exceptional new world-class mining venture in a geographically desirable location," said Benchmark's independent director Keith Peck.

Thesis recently had significant high-grade intercepts at its Ranch project, including the following:

In January, Benchmark announced that it had begun using artificial intelligence to model gold-bearing trends within its deposits and better define drill targeting.

Other mining companies operating in the Toodoggone region include TDG Gold Corp. (TSX-V: TDG), Finlay Minerals Ltd. (TSX-V: FYL) (OTC: FYMNF) and CopAur Minerals Inc. (TSX-V: CPAU).

Calibre Mining (TSX: CXB) (OTCQX: CXBMF) is another Vancouver-based explorer with a strong financial position. The company generated record revenue and gold sales during Q1 this year, bringing in a cash flow of $26.7 million — a 41 per cent increase year-over-year from 2022.

The value of Calibre's shares has increased by 85.29 per cent over the past six months and rose by 0.98 per cent Tuesday to $1.58 on the Toronto Stock Exchange.

Calibre Mining is a sponsor of Mugglehead news coverage

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