Microcap company Xmet Inc. (XME.V) has committed a coup with today’s press release they are acquiring Clifton Star Resources’ (CFO.V) Duquesne project in Québec, Canada.
Xmet is acquiring Clifton’s property very cheap, by giving them a strategic position of 19.9% in Xmet. With this acquisition, Xmet unfolds its plans for the future and after the transactions with Clifton Star and Brionor Resources (BNR.V) Xmet will have almost 1.6M ounces of gold in NI43 compliant resource estimates.
Both transactions still have to close, and this will be dependent on the closing of the 100% acquisition of the Duquesne-Ottoman project, whereby Xmet pays Globex $6.5M for an initial 75% interest and between $2.5M and $2.8M for the final 25%.
If all these acquisitions go through, Xmet will only have 100M shares outstanding, which at C$0.06 gives them a market capitalization of $6M. The company will obviously have to raise money to fulfill the $6.5M initial payment to acquire Duquesne-Ottoman, but even with 200M shares outstanding, Xmet will only be trading at only $8.5/oz in the ground, which is remarkably low for a company operating in a safe region as Québec. We will initiate a long position in Xmet shortly.
You can read the press release here (pdf).
Disclosure: The author holds a long position in Xmet Inc. Please see our disclaimer for current positions.
