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Key points
- Silver Lake declared successful bidder for Canada's Harte Gold
- Company to acquire 2% net smelter royalty on the entire Sugar Zone Property
- Transaction expected to finalise by end of February
The Silver Lake Resources Limited. (ASX: SLR) share price is in the red at time of writing, down 0.8%.
It's not just the ASX gold explorer dipping lower though. The All Ordinaries Index (ASX: XAO) is down 1.3% at this same time.
Below we take a look at the company's bidding update.
What bidding update was announced?
Silver Lake's share price is dipping despite the company reporting that its bid for Harte Gold Corp has been declared successful.
Listed on Canada's Toronto Stock Exchange (TSX), Harte Gold is a gold mining company that owns and operates the Sugar Zone mine in Ontario with 81,287 hectares of associated land.
The sale and investment solicitation process (SISP) was given the green light by the Ontario Superior Court of Justice on 20 December. That process was completed on 14 January, with Silver Lake's bid declared successful on 19 January.
According to the release, the agreement comprises:
- Approximately US$74.5 million (AU$103.0 million) in credit bid consideration reflecting the value owed to Silver Lake under the Credit Facilities acquired from BNP Paribas and the full amount of the Court-approved Debtor in Possession Loan subsequently made available to Harte Gold during the Proceedings
- Applicable liabilities (including the ~US$22 million out of the money hedge book and accounts associated with the operation of the Sugar Zone operation to allow for a transition of operation under Silver Lake ownership)
- The full and final satisfaction of finance facility obligations owed by Harte Gold to Appian Capital Advisory by way of the issuance of ~25 million Silver Lake shares
- Cash consideration for payment of certain priority claims and for the purposes of completing the CCAA Proceedings and certain ancillary matters (estimated to be not more than US$3 million)
Silver Lake expects the transaction to close in the latter half of February.
Separately, the company reported that it's entered an agreement for the acquisition of a combined 2% net smelter royalty on the entire Sugar Zone Property from an affiliate of Appian. The acquisition price was reported to be US$22 million, which Silver Lake will pay for in shares.
This acquisition, which will reportedly reduce operating costs, remains subject to the completion of its acquisition of Harte Gold.
Silver Lake share price snapshot
Over the past year the Silver Lake share price has gained 7%. That's right about in line with the 6.5% gain posted by the All Ords over that same time.
Silver Lake shares are up 4% so far in 2022.
