Desert Star Resources (DSR.V) and Providence Resources (PV.V) have announced that they have agreed to merge. The amalgamated company will focus on copper and gold projects in the south western United States.
The newly merged company with have ~$2.3* million in cash with the majority coming from Providence, who reported $1.56 million cash on the balance sheet at the end of June.
Desert Star announced positive induced polarization (I.P.) results on the Copper King project in Arizona earlier this month. The I.P results show a high priority copper-gold porphyry drill target. The Copper King project is located in an endowed copper mining district and contains alteration zonation patterns that are consistent with the top of porphyry copper systems.
Also showing promising exploration potential in the portfolio are the Red Top and Copper Spring projects. The team at Desert Star reviewed over 350 projects globally before selecting these three. All three projects are drill ready and permitting is underway.
Desert Star will also try to close a private placement for $1.5 million by issuing shares at 15 cents.
Hats off to the management teams for combining the two companies under one roof. This should result in less general and administrative expenses and more money being put into the ground.
- For every one common share of Providence, shareholders will receive approximately 0.3 of an Amalco common share and 0.3 of a common share purchase warrant of Amalco. Each Amalco warrant will entitle the holder to acquire an additional share of Amalco for a period of two years at a price of 25 cents per Amalco warrant share.
- For every one common share of Desert Star, shareholders will receive one Amalco common share.
“The amalgamation of Desert Star and Providence is a good strategic fit as both companies share several individuals who comprise their management and exploration teams. The amalgamation exploits an opportunity to combine the prospective assets of Desert Star with the cash position of Providence. The combined entity will result in a unified strategic focus and will be well positioned to continue developing prospective assets in the southwestern U.S. and pursuing innovative generative programs to feed a pipeline of prospective opportunities,” stated Vince Sorace, president and chief executive officer of Desert Star and Providence Resources.
Desert Star is a high risk high reward stock but they have 3 excellent shots at making a discovery. If just one of the properties comes up with a discovery we will easily see multiples of the current stock price.
Share price: $0.175
Market Cap: $5.18M
Shares issued: 29,091,744
Stock options: 2,255,000
*includes$495,000 debenture closed in September by Desert Star
Disclosure: Desert Star Resources. is a CEO.ca client. All facts are to be verified by the reader. Always do your own due diligence as this is not investment advice (please see full disclaimer).For more information visit www.desertstar.ca and add DSR.TSXV to your watch list.