PNGG eyeing NG Gold

PNG Gold Corp is eyeing to acquire New Guinea Gold Corp.
This was announced last week by the two gold miners, saying that they had entered into a letter of intent for that purpose.
This announcement was made last Friday in Vancouver, Canada in response to recent unusual trading volume in NGG’s common shares in the absence of any material news from the traded company.
This letter of intent was effective as of Oct 29 and non-binding, except for an exclusivity period and certain other non-material matters.
The terms presently under discussion would involve an arrangement under which NGG shareholders would be issued one common share of PNG Gold for each 5.714 common shares of NGG held.
The management believed the transaction, if consummated, would provide a platform for growth for shareholders of each company.
NGG said it would provide its shareholders an immediate premium to NGG’s recent stock price, and afford a secure and expedient development path for NGG’s production and exploration licences on New Britain Island.
PNG Gold’s shareholders will benefit from the transaction by the acquisition and recapitalisation of the Sinivit mine. Recapitalisation will enable the mine to significantly improve operational performance.
PNG Gold’s management also intended to implement an expanded exploration programme.
The addition of Sinivit would also enhance PNG Gold’s ability to advance its 100% earned interest in the Imwauna Property on Normanby Island.
However, PNG Gold and NGG cautioned that no binding agreement had been reached.
They said that the execution of any such agreement would be conditional upon, among other things, completion of satisfactory due diligence by PNG Gold and approval of the directors of the two companies.