Quebec-focused Monarch Gold (TSX: MQR; US-OTC: MRQRF) is taking a 14.2% stake in Unigold (TSXV: UGD), whose Nieta project in the Dominican Republic has an open-pit inferred resource of 39.49 million tonnes grading 1.59 grams gold per tonne for 2 million oz. gold.
Monarch has acquired a block of 6.5 million Unigold shares from an investor at a price of 11.5 ? per share for $747,500, payable by the issuance of 3.25 million common shares of Monarch at a price of 23 ? per share. Monarch's shares will be held in escrow for a 24-month period.
The Nieta project, situated on a 226 sq. km concession, is 200 km northwest of the capital city of Santo Domingo, and the Dominican Republic's second-largest city, Santiago de los Caballeros, is 100 km northeast of the project.
Over the last five years, Unigold has spent more than $20 million on exploration at Nieta, with more than 50,000 metres of drilling.
Monarch's president and CEO, Jean-Marc Lacoste, described the investment as "an incredible opportunity" that management "could not pass up."
"Monarch has always been interested in acquiring undervalued assets, with a view to developing their full value," Lacoste said in prepared remarks. "With Unigold, we are acquiring a block of shares of a company, with a resource of more than 2 million oz. gold, at a fraction of the market price for such an asset and with a strong shareholder base."
Monarch has a portfolio of assets in Quebec's Abitibi mining camp. Its flagship Wasamac deposit, 15 km west of Rouyn-Noranda, has a measured and indicated resource of 2.6 million oz. gold contained within 29.86 million tonnes grading 2.7 grams gold and inferred resources of 293,900 oz. gold contained within 4.16 million tonnes of 2.20 grams gold.
Monarch is trading at 22.5 ? per share in a 52-week trading range of 14.5 ? to 32.5 ?. The company has a $55-million market capitalization.