bri

Amir Adnani’s Brazil Resources (BRI:TSXV) has closed its acquisition of Brazilian Gold (BGC:TSXV) which it announced in late September.  BRI purchased BGC using its shares in an exchange ratio of 0.172:1 putting a value of roughly $13.5 million on BGC and their extensive gold exploration asset portfolio in Brazil.  Along with building Uranium Energy Corp (UEC:NYSE), Adnani has been busy in Brazil, acquiring the Cachoeira Project last year (from Luna Gold) and is known for being an avid spokesperson for his companies, helping promote the value proposition to shareholders.  BRI has since extended a $300,000 payment to Luna for this project until September 24, 2014 giving the company some financial breathing room.

“This is representative of the accretive opportunities that have  arisen as a result of recent market conditions,” stated Adnani after announcing the acquisition of BGC.  Clearly, Adnani doesn’t mind issuing stock to acquire distressed assets in this environment.

BRI bought BGC’s flagship Sao Jorge deposit for $18/oz of indicated gold in the ground and less then $8.oz of total resources (indicated+inferred) in the ground.  The Sao Jorge deposit hosts 715koz of indicated and another +1moz of inferred gold.  BGC released a PEA this year (@$1500 gold has a after-tax NPV(5%) of $407 million and a 46% IRR).

BRI has a small treasury with less than $1.5 million in cash on the books.  Adnani has a strong financial backer in Brasilinvest Group which manages roughly $6billion in assets and is one of the largest private merchant banks in Brazil.  Brasilinvest’s principal shareholder Chairman, Mario Garnero, sits on the board as does the Hon. Herb  Dhaliwal (former Minister of Natural Resources under Prime Minister Jean Chretien.  Adnani is coming off huge success with UEC, building it from exploration, through permitting and into one of the lowest cost uranium producers in just a half decade.

The shares have come under pressure this year, down roughly 40% YTD, but with the S&P/TSX Venture Composite down 25% YTD, they have been able to hold on.

Read: Brazil Resources Completes Acquisition of Brazilian Gold Corporation

Watch Amir’s discussion with Tommy about Uranium Energy Corp: