Shares of Eagle Plains Resources (EPL:TSX-V) jumped 13% on the news that its spinout company, Taiga Gold Corp. (TGC:CSE), is expected to be acquired by SSR (SSRM:TSX) in a friendly takeover bid. The all-cash offer has received resounding support from the leadership groups of both Taiga and Eagle Plains and will please shareholders with a 36% premium on the stock’s closing price on December 1. The takeover is expected to be ratified with at least two-thirds majority decision by shareholders in March, 2022.
Eagle Plains, a junior geological exploration company based in Cranbrook, BC, announced the formation of Taiga in April, 2018, as a company spun out to assume ownership of six properties in Saskatchewan’s Trans-Hudson Corridor. The jewel of these properties, dubbed the Fisher Project, flanks the southeastern frontier of SSR’s lucrative Seabee Project, which has enjoyed annual gold production in excess of 100,000oz per year since 2018. SSR has hitherto accessed the Fisher Project through an 80/20 joint venture with Taiga, but now seeks to secure sole ownership of the claim to extend the life of its Seabee Project.
The takeover of its spinout is the latest strategic success for Eagle Plains, whose touted approach of controlled risk and upside exposure through joint ventures continues to bear fruit. The company’s ambitions for the eventual sale of Taiga were clear even before the spinout was officially announced. In an interview with David Morgan in March, 2018, Eagle Plains CEO Tim Termuende expressed his enthusiasm for the Fisher Project and its strategic importance to SSR.
“We were quite surprised that [SSR] had really no expansion claims [around] the mine,” said Termuende, “we were able to stake claims to within a kilometre of their existing deposit that they’re mining now… I think that’ll be an M&A target for those guys.”
Three years later, Termuende’s words seem prophetic with another win for Eagle Plains shareholders. The foresight and capability required to identify, act on and eventually profit from this opportunity is a reflection of the industry wisdom that has led Eagle Plains to 28 years of success as the 9th oldest company on the TSX-V.
Through its history, Eagle Plains has remained committed to an approach of diversified upside exposure and is currently involved in 50 exploration projects in Western Canada with eight option project agreements in place with other junior exploration companies. The company controls its costs of exploration through joint ventures with other explorers who commit to exploration investments and stock payments to Eagle Plains in exchange for a stake in a prospective site.
With the resounding success of the Taiga deal and a strong, debt-free balance sheet, Eagle Plains investors are attuned to the very real potential for more spinoffs, takeovers and windfall profits in the near future.
Disclaimer: I am not a certified financial analyst, licensed broker, fund dealer, exempt market dealer nor hold a professional license to offer investment advice. Always conduct your own thorough due diligence and talk to a licensed investment adviser prior to making any investment decisions.