Exclusively in Germany, Goldinvest.de recently reported on the merger of the silver companies Silver47 Exploration (WKN A408EQ / TSXV AGA) and Summa Silver (WKN A2P4EE / TSXV SSVR). This merger creates a company with total resources of 246 million ounces of silver equivalent (236 million ounces in the inferred category and 10 million ounces in the indicated category) exclusively in the USA.
The merged company now plans to expand this already strong base even more aggressively than previously planned. In particular, the summer months will be used to conduct an extensive drilling program on the Red Mountain project in Alaska. And investors are apparently lining up to finance these activities.
Over-allotment Option Fully Exercised in Summa Silver Financing
As part of the merger, Silver47 and Summa had agreed that the latter would conduct a private placement of CAD 5 million to finance the accelerated drilling program on Red Mountain. As Summa has now announced, they were able to issue subscription receipts worth even CAD 6.9 million, with the banks conducting the financing fully exercising their over-allotment option.
The fact that these are subscription receipts and not, as usual, directly units of common shares and possibly warrants is due to the circumstance that the merger of Silver47 Exploration and Summa Silver has not yet been officially completed. The subscription receipts will be held in trust until then. After the merger is completed, each subscription receipt will entitle the holder to receive one unit of Summa without any additional consideration and without the holder having to take any further action.
Each unit consists of one common share of Summa and one-half of a warrant to purchase a common share. Upon completion of the transaction, each Summa warrant will entitle the holder to purchase one common share of Silver47 at an exercise price of CAD 0.7964 per warrant share after adjusting for the exchange ratio until the date that is 24 months after the satisfaction or waiver of the escrow release conditions.
Conclusion: The merger of Summa Silver and Silver47 Exploration now seems to have been digested. Both Silver47 and Summa Silver have now entered a steep climb, which of course may also be related to the fact that the silver price has now begun a breakout rally. But the merger is also likely to have drawn broader public attention to both companies. We are now eagerly awaiting the next steps!
