Shares in Gold Canyon Resources (CVE:GCU) and PC Gold (CVE:PKL) shot up on Tuesday massive trading volumes, after announcing that First Mining Finance Corp. (CVE:FF) will be acquiring all the shares of both explorers.
Vancouver-based Gold Canyon was last trading at $0.175, up 52.2%, drifting lower as the day wore on after the counter doubled at the start of trade on the TSX Venture Exchange. Gold Canyon, which owns gold projects in Canada and a rare earth prospecting licence in Tanzania is now worth $29 million in Toronto. More than 7.7 million shares changed hands (some 30 times usual volumes) making it the most active stock on the venture board.
PC Gold, based in Toronto, jumped 66% by the close affording the Ontario old mine explorer a $5.4 million market valuation after roughly 2 million shares were traded. Both counters ended well below the implied premium offered by First Mining over their 30-day average price which was 204% for Gold Canyon and 255% above PC Gold’s share price.
First Mining Finance shareholders were on the losing end of the deal – the Vancouver company which calls itself a mineral bank gave up a fifth of its value on the TSX-V by the close for a $28.2 million market cap. First Mining owns 19 mineral assets in Canada, Mexico and the United States.
At the end of the day’s trading the juniors’ combined capitalization fell well short of the the $100 million envisaged by the companies in a transaction designed to “increase analyst coverage and trading liquidity allowing for broader access to capital markets including institutional support,” according to the statement.
Under the deal First Mining has agreed to acquire all of the issued and outstanding common shares of both Gold Canyon and PC Gold.
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