Vancouver's Buffalo Gold Ltd. (TSX-V:BUF) and Sargold Resource Corp. (TSX-V:SRG) have agreed to merge in an all share deal worth roughly $26 million.
The merger will give Buffalo Gold access to Sargold's precious metals resource interests on the island of Sardinia east of Italy in the Mediterranean Sea. It will also expand its mining interests beyond Australia and the South Pacific.
Under the terms of the merger, Sargold shareholders will receive one Buffalo Gold share and a common share purchase warrant for 3.5 Sargold common shares. The deal represents a 90% premium on Sargold shares based on Sargold's closing share price on August 31, 2007.
Following the deal, Sargold will hold approximately 25% equity ownership in the combined company.
The deal, which is subject to regulatory and shareholder approval, is expected to close by the end of October.
Buffalo Gold's share price range during the past week: between $0.96 and $1.15; 52-week high: $2.87; 52-week low: $0.75.