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Major Gold Buyout puts Canadian Explorer in the Spotlight

Originally posted on Smart Money Gains

Earlier this month Australian Gold producer St. Barbara ( ASX: SBM ) announced it is acquiring 100% of Canadian gold producer Atlantic Gold ( CSE: AGB ) in a deal valued at $802 million.

St Barbara’s offer represents a 41.1% premium to Atlantic’s closing share price on the day of the announcement. This deal comes after Australia’s largest gold company Newcrest Mining purchased close to a billion-dollar stake in Imperial Metals earlier this year. Trends suggest that other Australian companies will be looking at purchasing Canadian assets in the near future. The valuation gap between Australian and Canadian producers is projected to lead to consolidation for mid-tier miners.

BMO Capital Markets analyst Brian Quast notes that other potential acquirers could include New Gold (TSX: NGD); Pretium Resources (NYSE: PVG); TMAC Resources (TSX: TMR) and Wesdome Gold Mines (TSX: WDO).

Atlantic Gold Company Overview

Atlantic Gold began commercial gold production in the Moose River Consolidated mining complex a year ago. The operation consists of two open-pit gold deposits that produced over 90,000 ounces of gold at the low all sustaining cost of C$731 per ounce. The company is awaiting a mining permit for a nearby project and is also exploring other areas of their land holdings.

Nova Scotia Gold Mining

Gold mining has been a big part of this Canadian Province’s economy. To date, over a million ounces of gold have been produced in the province since mining began in 1861. So far there have been 65 historic gold districts hosting past mining operations.

Atlantic Gold’s Neighbour has a massive land position

Meguma Gold has extensive land holdings adjacent to Atlantic Gold and that leads gold analysts to believe that there is significant gold content at their properties. With Atlantic producing MegumaGold can expect a ton of appetite for their assets as their exploration program moves forward. This map puts it all in perspective…..

MegumaGold Corp.




Market Cap: C$13M

Shares issued: 96,530,640

The company recently announced promising results from ongoing exploration work including one sample that graded as high as 49.8 grams per ton Au. These samples came from waste rock piles associated with previous mining and certainly confirm gold mineralization. It seems that they have found the location of a gold vein and further work should help uncover more details as to the magnitude of the discovery.

Meguma is going to be commencing a drilling program that is designed to confirm, expand and reinterpret the known mineralization on this property. The company has sufficient capital to continue its drill program and their 179,280-hectare land position and 11,147 mineral claims should surely lead to some great findings in the near future.

Bottom Line

Atlantic Gold has been one of the biggest success stories in Canadian gold mining this year. The company saw it’s share price surged 73% YTD. This acquisition is putting MegumaGold in the spotlight due to the close proximity of the projects.

With such a massive land position and experience gold mining veterans MegumaGold has the potential to be the next Atlantic Gold within a few years.



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