Canadian miners MegumaGold and Osprey Gold Development have entered into a definitive agreement to merge their respective businesses to create a leading Nova Scotia precious metals exploration company.

“This consolidation forms the foundation of a company positioned to capitalise on the emerging Meguma gold camp in Nova Scotia, amid a rapidly developing gold market.

“The combination of MegumaGold’s commanding land position in Nova Scotia and Osprey’s existing gold deposits creates a unique synergy designed to increase shareholder value through the use of modern exploration techniques in the Meguma gold district,” says MegumaGold president Theo van der Linde.

Osprey president Cooper Quinn notes that the combined entity of the two companies will have a leading group of assets in the region and a stronger market presence that either company could achieve alone.

“We look forward to leveraging the collective strengths of the new team to explore the combined portfolio of assets ranging from early stage exploration through resource expansion and development,” he adds.

In terms of the agreement, MegumaGold will acquire all of the issued and outstanding shares of Osprey.

Each shareholder of Osprey will receive such number of common shares of MegumaGold as is equal to the product of the number of Osprey shares held by such shareholder at an exchange ratio which equals one Meguma share for every two Osprey shares outstanding at the closing of the transaction.

The companies have provided that unexercised Osprey options and share purchase warrants will be assumed by MegumaGold and will remain outstanding for their full term, and, following the closing date of the transaction, entitle the holder thereof to acquire MegumaGold Shares in lieu of Osprey shares.

Osprey will have the right to appoint two members to the board of directors of the new entity, with the total number of members of such board of directors to be initially set at five.

Osprey shall also contribute management personnel to the new entity.

The merger is still subject to the approval of two-thirds of the votes cast by the holders of Osprey’s common shares.

Further details as to the proposed record date and meeting date for Osprey’s special meeting of shareholders will be disclosed in due course. It is not anticipated that MegumaGold shareholders will be required to approve the transaction.