U.S. Silver and Gold Inc. and Scorpio Mining Corp. have agreed to merge, and will continue doing business under the Scorpio Mining name.
The combined company will have an operating platform which will include two producing mines, a third in development, and an advanced stage exploration project. The merger was announced Friday.
Scorpio is a Toronto-based silver producer, which owns the Nuestra Senora Mine in Mexico, along with the El Cajon development project.
Shareholders of U.S. Silver will receive 1.68 common shares of Scorpio Mining for each share of U.S. Silver held. Shareholders of Scorpio Mining will not have to exchange their shares in the transaction.
Once the transaction is complete, the combined company will have approximately 335 million common shares outstanding. Former shareholders of Scorpio will own approximately 59 percent, and former shareholders of U.S. Silver will own 41 percent.
The combined management team will be lead by Darren Blasutti, who will assume the title of president and chief executive officer.
The new board will be comprised of Blasutti and four directors each from Scorpio and U.S. Silver. Scorpio founder Peter Hawley will be chairman of the combined company.
"This merger creates a stronger, better positioned company that is capable of not only surviving the current low silver price environment, but potentially transitioning from a junior precious metals company to an intermediate producer over the next couple of years," Blasutti said in a news release.
"The diversified low-risk asset base, solid financial position, enhanced capital markets profile and proven abilities of the combined management team and board make this a compelling and unique value proposition for all shareholders," he added.
