Benchmark Metals and Thesis Gold Merge Operations in British Columbia

Benchmark Metals, a Canadian-based mineral exploration company, and Thesis Gold, another gold development and exploration company headquartered in Canada, recently signed an agreement to join forces in British Columbia. After the merger goes through, the companies will control one of the largest precious metals operations in northern British Columbia’s Toodoggone mining district.

Benchmark Metals controls the Lawyer’s Project, one of Canada’s largest gold-silver operations, consisting of three main zones: Cliff Creek, Dukes Ridge, and AGB. The project sits adjacent to the Ranch Project, owned by Thesis Gold, about 300 kilometers north of Smithers, BC. Both 100%-owned projects sit near the Kemess gold project owned by Centerra Gold, an open-pit mine that produced 3 million ounces of gold and 750 million pounds of copper from 1998 to 2011.

Benchmark Metals and Thesis Gold announced the definitive arrangement agreement on June 5, 2023, outlining various terms for the merger. To start, shareholders of Thesis Gold will receive 2.56% of a Benchmark Metals common share for every Thesis share they hold at a 96¢-per-share value. This transaction represents a 27.8% premium for Thesis Gold shareholders based on a 20-day weighted average trading price assessment on Thesis Gold shares.

Assuming the transaction goes through and all agreements close, Benchmark Metals’ shareholders will own 60% of the combined outstanding shares, while Thesis Gold’s shareholders will own 40%. Following this protocol, Benchmark Metals and Thesis Gold plan to conduct a 2:6:1 share consolidation plan for the remaining common shares. After finalizing all agreements, the company will change its name to Thesis Gold Inc.

“The merger of Benchmark and Thesis will create a district scale development and exploration project with significant growth potential,” Ewan Webster, the president and CEO of Thesis Gold, explained. “The combined company will be well capitalized to execute on a catalyst rich exploration and development program over the next 12-15 months, with over 50,000 meters of drilling between both projects, focusing on resource growth, exploration, and discovery; and the culmination of this work will deliver an updated resource estimate encompassing ounces for both projects, including high-grade near surface material at the Ranch Project; and an updated Preliminary Economic Assessment (PEA) will add high-grade underground ounces from Lawyers and the newly delineated Ranch resource.”

The Ranch Project, consisting of 180 square kilometers and 20 near-surface gold-copper targets, offers high-grade potential, including 91 meters of grading at 1.92 grams of gold per ton. The 144-square-kilometer Lawyer’s Project offers an annual average production of 169,000 gold equivalent ounces with a 12-year mine life based on the company’s completed PEA.

“For the new PEA, the Combined Company anticipates increased per year production, high-grade starter pits, rapid capital payback, materially improved Net Present Value (NPV) and Internal Rate of Return (IRR), and extended mine life. These milestones and timelines have been developed to unlock substantial value and solidify the potential of these two deposits into one world-class project,” Webster concluded.

The PEA study forecasted an initial CA$493 million capital, with the after-tax net value (5% discount rate) at CA$577 million. The Lawyer’s Project offers measured and indicated resources of 57.4 million tons of gold grading at 1.2 grams per ton as of January 13, 2022. The inferred resources tack on another 4.9 million tons at 2.2 grams of gold per ton and 36.1 grams of silver per ton, reaching 345,000 ounces of gold and 5.7 million ounces of silver.

“The business combination with Thesis is an exciting transaction that is transformative for both companies and their shareholders,” Keith Peck, an independent director at Benchmark Metals and the Chair of the Benchmark Special Committee, explained. “The merger of these companies establishes a leading precious metals development and exploration project in British Columbia 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.”

Following the release of this agreement, Thesis Gold’s shares went up 6.6% within the day to CA81¢ per share. Benchmark Metals also traded up following the announcement, with shares increasing by 1.3% to 38¢ per share.

As Benchmark Metals and Thesis Gold merge operations in British Columbia, both companies show remarking excitement toward the new venture. As gold demand continues soaring across the globe, it only makes sense that major organizations want to join forces to capitalize on the unique opportunity. With gold prices hitting record levels, we can likely expect more exciting mergers like this coming soon.

As always, investors should consult their advisors before making any financial decisions.

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