Alio Gold Inc (ALO, Financial) has informed the market that its acquisition of Rye Patch Gold Corp.(RPM.V, Financial) has been successfully completed.
For each share, Rye Patch shareholders received a total of 0.48 ordinary shares of Alio Gold in addition to cash of almost 8 cents.
Alio Gold also announced changes in the board of directors of the company. Tim Baker and John Mansanti, who were former executives at Rye Patch, are now directors on the board of Alio Gold. The board of executives of Alio Gold is now made up of nine members.
Doug Jones, who was formerly employed by Rye Patch, is now the chief operating officer at Alio Gold. Jones is responsible for daily operations at Alio Gold.
The delisting of Rye Patch’s shares from the Canadian TSX Venture Exchange is expected to occur on May 30.Â
Rye Patch Gold Corp. is a Canadian precious metal exploration company with mineral interests in Nevada. The company has total measured and indicated mineral resources of 3.2 million equivalent ounces of gold and 104.3 million equivalent ounces of silver. Rye Patch Gold Corp. is also a developer of the properties that it acquired.
Rye Patch Gold Corp’s producing asset is the Florida Canyon mine. The asset has a net present value of $48.5 million and an internal rate of return of 34.4%. The net present value has been calculated based on a discount ratio of 7.5% while the other properties of Rye Patch are still in an exploration status.
Rye Patch Gold Corp. has approximately 81.1 million shares outstanding.
Once the new assets are integrated, the company will have new development and exploration opportunities for near-term production growth. The combined company will be a low-cost gold and silver producer. Alio Gold will see its cash-generating ability enhanced. That will be crucial for the financing of the project at Ana Paula.
For the 52-weeks of trading, Alio Gold has fallen 64% to $1.73 per share. Alio Gold has a market capitalization of $77.67 million. Alio Gold is now trading underneath the 200, 100 and 50-SMA lines:
Alio Gold Inc. has a price-book ratio of 0.39 times versus an industry median of 2.06 times and an enterprise value to earnings before interest, taxes, depreciation and amortization ratio of 1.93 times. The industry average is 9.9 times for the EV-to-EBITDA ratio. Alio Gold has a 12-trailing month EBITDA margin of 21.8%. The industry has a median of nearly 25%.
(Disclosure: I have no positions in any security mentioned in this article.)
