American Pacific Mining M&A Drive set to Make Company Major Player in Mining Industry

Image: Tuscarora Gold Project

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

American Pacific Mining Corp. USGD USGDF 1QC, a gold exploration company focused on precious metal opportunities in the Western United States, is on a steady trajectory to become a significant player in the mining industry.

As a junior mining company, American Pacific has gone all out over the past few years from its humble beginnings to become a noticeable player — one whose future looks like it could be very bright.

High-Grade Samples

“Our strategic advantage has been Eric Saderholm, former head of Exploration in the Western US for Newmont NEW,” states Warwick Smith CEO. “Newmont was looking for assets of 3+ million ounces of gold; so Eric had the opportunity to review numerous 1+/- million ounces deposits that can grow. That’s where American Pacific thrives and what has driven our M&A mandate.”

Potential Long-Term Impact of COVID-19 on Mining and Metals Companies 

Andrew Swart, Global Leader of Mining and Metals in a report by Deloitte on the long-term implications of COVID-19 for the mining sector, observed that:

  • Companies with balance sheet strength now may take advantage of mergers and acquisitions (M&A) opportunities driving further consolidation in key sectors.
  • Prior to the crisis, liquidity was tight in the junior end of the market; this is likely to be further exacerbated.
  • Mining companies may see a benefit in IROCs (integrated operations centers) long-term as well as opportunities for automation of critical roles and functions.
  • Companies, pre-crisis, were expected to provide value beyond compliance to communities and host governments. This could also accelerate, particularly if healthcare infrastructure in developing markets becomes strained.

Junior mining companies and explorers currently offer the best value in the mining sector. For any investor, companies like American Pacific should be the focus as the global economy starts to recover from the impact of the coronavirus pandemic.

American Pacific Mining Investment Highlights

The addition of a strategic investment from Michael Gentile has helped to cast a spotlight on American Pacific. Mr. Gentile is a 19.9% shareholder in American Pacific and brings an incredibly impressive track record of success such as his investment in Arizona Metals TSXV (AZMCF : OTCQB) at $0.68 now trading around $4.05.

The mining industry's potential is evident in the strides that American Pacific has made over the past few years. Despite the pandemic, the company has been strong on the M&A front, completing a number of mergers.

The company completed a transformational transaction in 2020 by acquiring the Madison Copper Gold Project near Silver Star Montana, a joint venture with Kennecott Exploration Company, part of the Rio Tinto Group (ASX, LON: RIO).

For this transaction, the company was selected as a finalist in the S&P Global Platts Global Metals 2020 Deal of the Year Award. Through the earn-in agreement, Rio Tinto may spend $30 million to earn up to 70% of the project.

Also in the company's project portfolio are 3 highly prospective precious metals projects, the Gooseberry Gold and Silver Project, the Red Hill Project, and the Tuscarora Gold Project, all located in Nevada — one of the world's most prolific precious metals jurisdictions.

In September this year, American Pacific announced it had entered into a definitive agreement with Ubica Gold Corp to acquire its assets. The company will effectively own Ubica's 77 claims at Tuscarora, totaling 1,031 acres.

The agreement with Ubica, a project generator majority-owned by Plethora Private Equity, will double the size of American Pacific's Tuscarora land package adding 76 unpatented and 1 patented claims.

Apart from the agreement, American Pacific also revealed high-grade rock chip and grab samples collected from the newly expanded land package at its Tuscarora Gold Project.

Tuscarora Gold Project

"If there is one key takeaway it is this: American Pacific now has 3 opportunities at company maker-sized deposits in the Western U.S. that are all being drilled in 2021. The addition of an eventual partnership at Red Hill will bring that number to 4," Warwick Smith, CEO of American Pacific said.

American Pacific and Ubica Gold Corp Transaction Terms

Pursuant to the terms of the agreement, upon the closing of the Transaction, American Pacific will acquire the 77 claims at Tuscarora totaling 1,031 acres in consideration for the issuance of 3,700,000 common shares of the company to Ubica and a cash payment of $800,000.

The payment shares will be subject to voluntary hold periods, with 25% of the shares released on the closing date and an additional 25% released every 6 months thereafter until all payment shares have been released. The transaction is subject to customary closing conditions.

American Pacific is set to begin drilling at Gooseberry in late September 2021, with Tuscarora drilling expected to commence in Q4 this year. 

American Pacific is one of only 3% of mining companies that are within 10% of its 52 week high – with almost 50% of companies near their 52 week low. 

American Pacific will see drilling on its 3 high grade, key assets in 2021. Significant new flow, fully capitalized and a stock chart outperforming its peers: American Pacific Mining is bucking the trend in the gold space.

Read more about the deal here and more about American Pacific Mining Corp. here.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.

Market News and Data brought to you by Benzinga APIs
Posted In: Penny StocksCommoditiesMarketsAmerican Pacific MiningPartner Content
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!