U.S. Gold (NASDAQ: USAU) is adding a new exploration project to its portfolio through its acquisition of Northern Panther Resource Corporation, which holds the Challis gold project in Idaho.
U.S. Gold is currently focused on developing the advanced-stage Copper King project in Wyoming and the Keystone project located in the Cortez Gold Trend of Nevada.
Under the terms of the merger agreement, U.S. Gold has issued 581,053 restricted common shares to shareholders of Northern Panther as well as 106,894 shares of newly created preferred stock, each potentially convertible into 10 common shares of U.S. Gold.
Concurrently with the merger, Northern Panther shareholders have led a financing in which U.S. Gold received subscriptions for shares of its preferred stock and warrants up to US$5.5 million. Including the US$2.5 million cash already held by Northern Panther, the company would have US$8 million in additional capital.
The Challis property is located 75 km southwest of Salmon, Id., within the tertiary challis volcanic field. The project has an NI 43-101 (not current) resource of 313,825 oz. gold at 1.22 grams per tonne.
Northern Panther is a newly formed Nevada company whose shareholders include several seasoned professionals in the mining industry. One of the shareholders, George Bee, was former president and CEO of Andina Minerals, which was acquired by Hochschild Mining (LSE: HOC) in 2012.
Bee was also involved in the development of the Fruta del Norte project in Ecuador while working as chief operating officer of Aurelian Resources. Prior to that, Bee had a 16-year career at Barrick Gold (TSX: ABX; NYSE: GOLD), where he was part of the team that developed Goldstrike in Nevada.
“We are acquiring not only an additional high-potential exploration project, but a significant cash balance and some of the industry’s leading shareholders, who plan to be very hands-on going forward,” president and CEO Edward Karr said in a press release.
The U.S.-focused gold explorer has a $31.1-million market capitalization.