Chalice Gold Mines in Coventry takeover bid

West Perth-based Chalice Gold Mines has made an offer to merge with Canadian gold developer Coventry Resources as it seeks to find assets to boost its cash flow.

Chalice said yesterday it had executed a binding term sheet for the proposed merger, which would see Coventry shareholders receive one Chalice share for every 1.78 Coventry shares and hold approximately 17 per cent of the merged company.

The merger would combine Chalice’s cash position of $55 million with Coventry’s 100 per cent interest in the Cameron Gold Camp in Ontario, Canada.

Chalice managing director Bill Bent said the transaction preserved Chalice’s cash balance while also providing flexibility to look at further acquisitions.

“This project hits right in our sweet spot in terms of our current technical ability and I am very confident we can add significant value to this project with our current team and a focused exploration budget,” Mr Bent said.

The merger is subject to the approval of Coventry shareholders as well as various regulatory authorities and is expected to be completed by mid-December.