NovaCopper CEO Rick Van Nieuwenhuyse

NovaCopper CEO Rick Van Nieuwenhuyse

Consolidation in the junior mining industry continues with NovaCopper proposing to acquire Sunward Resources in an all-share deal valuing Sunward at approximately US $27.6 million, more than double its current market capitalization of about C $13.5 million.

The proposed transaction creates a junior miner with significant projects in Alaska and Colombia, excellent management and very influential backers including John Paulson.

Rick Van Nieuwenhuyse's NovaCopper (NCQ.TO) controls the Arctic and Bornite deposits located in the Ambler mining district of Alaska, USA. At the Arctic deposit, the company plans to advance the deposit towards feasibility with a US$8-10 million field program this summer.

The acquisition of Sunward will provide NovaCopper with the 100%-owned Titiribi Project in Colombia, which hosts NI 43 101-compliant Measured and Indicated Resource of 4.63 million ounces of gold contained within 285.8 million tonnes grading 0.50 grams/tonne and Inferred Resource of 6.01 million ounces of gold contained within 349.4 million tonnes grading 0.53 grams/tonne. All Titiribi resources were assessed using a cut-off of 0.3 grams/tonne gold. Titiribi also hosts 654.4 million pounds of copper in the Measured & Indicated Mineral Resource and 216.3 million pounds of copper in the Inferred Resource.

Highlights and Benefits of the Combined Company

  • Strong balance sheet, expected to have approximately US$23 million (C$28 million) in cash upon the closing of the Transaction, significantly de-risking the development of the Ambler mining district;
  • Sufficient cash to advance the Arctic deposit towards feasibility over an estimated two to three year period, in parallel with AIDEA's infrastructure development activities;
  • Sufficient cash to commit approximately US$8-10 million to advancing the Upper Kobuk Mineral Projects during the 2015 field season; and in particular, to complete in-fill drilling of the Arctic in-pit resources, and collection of in-pit geotechnical and metallurgical data. The funds will also be utilized to advance assessment work at the Bornite deposit, specifically to evaluate potential synergies between the Arctic and Bornite deposits which are in close proximity; and
  • Additional exploration potential of the multi-million ounce Titiribi asset in Colombia.

All of Sunward's officers and directors support the NovaCopper deal. Additionally, Sunward's four biggest shareholders, including Gold First Investments Limited, Electrum Strategic Acquisitions LLC and Paulson & Co. Inc., who hold, in aggregate, approximately 70% of Sunward's issued and outstanding Shares, have agreed to support the deal at a special shareholders meeting to be held in June or July.

Upon completion of the Arrangement, the combined company will be owned approximately 58% by NovaCopper shareholders and 42% by Sunward shareholders.

For more information: NovaCopper and Sunward Announce Arrangement