The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North of 60 Mining News - June 5, 2023
Drilling has outlined 2.74 million ounces of gold and 52.9 million oz of silver in the measured and indicated resource categories on Benchmark Metals' Lawyers project in BC.
In a move that will merge two large gold projects in Northern British Columbia's Toodoggone Mining District, Benchmark Metals Inc. has entered into a deal to buy out Thesis Gold Inc.
"The merger of Benchmark and Thesis will create a district-scale development and exploration project with significant growth potential," said Thesis Gold President and CEO Ewan Webster.
The most advanced of these projects is Benchmark's Lawyers, a 144-square-kilometer (56 square miles) land package that hosts 67.38 million metric tons of measured and indicated resources averaging 1.26 grams per metric ton (2.74 million ounces) gold and 24.39 g/t (52.9 million oz) silver; plus 4.87 million metric tons of inferred resource averaging 2.39 g/t (378,000 oz) gold and 39.41 g/t (6.2 million oz) silver.
A preliminary economic assessment based on this resource envisions ore from open-pit mines at three Lawyers deposits – AGB, Cliff Creek, and Dukes Ridge – feeding a centrally located mill that would produce 1.7 million oz of gold and 26.7 million oz of silver over an initial 12 years of mining.
Lying immediately north of Lawyers, Thesis' 180,000-square-kilometer (69 square miles) Ranch property is at an earlier stage of exploration but has shown some intriguing near-surface gold results.
Highlights from roughly 40,000 meters of drilling completed at Ranch during 2022 include:
• 17.5 meters averaging 3.41 g/t gold and 23.51 g/t silver in hole 22BNZDD004.
• 91 meters averaging 1.81 g/t gold and 8.41 g/t silver in hole 22BNZDD008.
• 50.3 meters averaging 1.86 g/t gold and 5.96 g/t silver in hole 22BNGDD008.
• 95.7 meters averaging 1.6 g/t gold and 1.74 g/t silver in hole 22TH3DD015.
• 20.3 meters averaging 4.69 g/t gold and 15.29 g/t silver in hole 22RDGDD037.
With a combined treasury of more than C$28 million (US$20.8 million), Benchmark and Thesis plan to complete a total of more than 50,000 meters of drilling at Lawyers and Ranch this year.
This resource expansion, exploration, and discovery drilling is expected to deliver an updated resource estimate encompassing both projects, including an inaugural high-grade gold-silver resource for the near-surface mineralization identified at Ranch. The newly delineated Ranch resource and additional high-grade underground gold and silver being targeted this year at Lawyers will be incorporated into an updated PEA for the consolidated property.
"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," said Webster. "These milestones and timelines have been developed to unlock substantial value and solidify the potential of these two deposits into one world-class project."
Further details of the roughly 20,000-meter drill program slated for Lawyers this year can be read at Benchmark to take deeper look at Lawyers in the March 7, 2023 edition of North of 60 Mining News.
Under the agreement between the two Northern BC gold explorers, Benchmark would issue 2.5584 shares in exchange for each Thesis share. Based on the closing price of each company on June 2, this exchange ratio implies a C96 cent value for Thesis shares, which is roughly a 26.2% premium.
Existing shareholders of Benchmark and Thesis will own approximately 60% and 40%, respectively, of the outstanding shares of the combined company on the completion of the merger.
The merged company's board will consist of four directors nominated by Benchmark – Benchmark Metals CEO John Williamson, who will serve as chair; Keith Peck, Peter Gundy and Jody Shimkus – and three nominated by Thesis – Webster, Nicholas Stajduhar, and Thomas Mumford.
Webster will serve as president and CEO of the combined company.
After consulting their independent financial and legal advisors, the boards of both companies voted unanimously in favor of the merger.
"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," said Peck an independent Benchmark Metals director that chaired a special committee that considered the merger with Thesis.
The merger will need to be approved by the Supreme Court of British Columbia and 66.67% of Thesis shareholders. Thesis directors and officers, along with key shareholders, representing approximately 19.4% of the issued and outstanding Thesis shares, have committed their votes in support of the merger.
Subject to the satisfaction of these conditions, Benchmark and Thesis expect the combination to be finalized in the third quarter.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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