Keegan Resources (TSX: T.KGN, Stock Forum) Wednesday said it will merge with PMI Gold (TSX: T.PMV, Stock Forum), this according to a company news release.
The merged company will be named Asanko Gold and have a combined Measured and Indicated resource of 6.94 million gold ounces at an average grade of 1.90 grams per tonne (g/t), along with an Inferred resource of 2.65 million gold ounces at an average grade of 1.87 g/t.
PMI shareholders will receive 0.21 Asanko shares for each PMI share held, while existing Keegan security holders will not need to exchange their securities in the merger. Existing Keegan and PMI shareholders will each own approximately 50% of the combined company.
"This is truly a unique and exciting opportunity to combine these two adjacent and near-term development projects and to have available some $340 million in combined cash to fund a Mid-Tier scale production growth profile starting in about two years. We expect significant synergies through the joint development of Obotan and Esaase, which we expect will ultimately create one of the largest gold mining and exploration districts in Africa," said Keegan President and CEO Peter Breese.