Paramount Gold Nevada Corp. (NYSEMKT: PZG) has completed the months-long process of acquiring Calico Resources following the approval of the Supreme Court of British Columbia to close the transaction. With that, Calico has become a 100% owned subsidiary of PZG.
The closing of the deal comes after shareholders of Paramount Gold Nevada Corp. (NYSEMKT: PZG) gave the company the green light to issue new shares to owners of Calico as compensation for the acquisition. PZG acquired Calico in an all-stock transaction.
How Paramount Gold Nevada Corp. (NYSEMKT: PZG) changed hands?
Paramount Gold Nevada Corp. (NYSEMKT: PZG) agreed with Calico that it will issue a total of 7.17 million shares to Calico’s shareholders. In that case, a shareholder in Calico received 0.07 of a share of PZG’s common stock for every common share of Calico owned.
Paramount’s proposal to issue shares to Calico shareholders in compensation for their holding received overwhelming support of its own shareholders. About 98% of the company’s outstanding shares were represented at the special meeting to seek approval for the issuance of new shares to Calico holders.
The massive support speaks volumes of how Paramount shareholders favorably view the transaction to acquire Calico.
What’s Calico bringing on the table?
According to Paramount Gold Nevada Corp. (NYSEMKT: PZG)’s CEO, Glen Van Treek, the acquisition of Calico is adds to their portfolio another advanced-stage asset. As such, the acquisition is expected to more than double Paramount’s volume of measured and indicated contained previous metals.
Calico also enormously improves the gold grade of Paramount. The acquisition also increases the upside potential of the company’s exploration.
The management also didn’t miss to point out that acquisition of Calico will diversify Paramount’s assets and reduce shareholder risk.
Demand for safe-haven assets
Paramount Gold Nevada Corp. (NYSEMKT: PZG) is bringing Calico under its armpit at a time when experts predict continued demand for safe-haven assets such as gold and other precious metals. The economic volatility caused by the Britain’s decision to ditch the European Union has increased the appetite for safer stores of value. The rollout of economic stimulus packages by central banks in Asia, Europe and elsewhere in the world is also expected to increased demand for gold and other precious metals as safe store of value.