08:28 AM EDT, 05/02/2024 (MT Newswires) -- Contango ORE ( CTGO ) said on Thursday that it will buy HighGold Mining ( HGMIF ) for an equity value of about US$37 million ($51 million).

Under the terms of the agreement, each HighGold share will be exchanged for 0.019 shares of Contango share. The exchange ratio implies total consideration of $0.55 (US$0.40) per HighGold share, Contango said.

The consideration represents a premium of 59% based on Contango's and HighGold's 20-day volume weighted average price.

Upon completion of the transaction, existing Contango shareholders will own approximately 85% of the combined company with HighGold shareholders owning the rest.

In connection with the transaction, HighGold can appoint one director to the Contango's board of directors.