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Benchmark Metals and Thesis Gold combine forces in B.C.

Thesis Gold CEO says combined company will be well-capitalized for a 50,000-metre drill program at two projects over the next 12-15 months
If the transaction is approved and closed, Benchmark and Thesis shareholders will own about 60 per cent and 40 per cent, respectively, of the combined company’s outstanding shares.

The proposed merger of Benchmark Metals (TSXV: BNCH; US-OTC: BNCHF) and Thesis Gold(TSXV: TAU; US-OTC: THSGF) will create one of the largest precious metals development and exploration companies in the Toodoggone mining district of northern British Columbia, the companies say.

Benchmark Metals’ Lawyer’s gold silver project is adjacent to exploration targets at the Thesis Gold’s Ranch project, about 300 km north of Smithers. The two 100%-owned exploration projects are about 45 km northwest of the power grid at Centerra Gold’s (TSX: CG; NYSE: CCAU) Kemess underground gold project. The Kemess project hosts the former Kemess South open-pit mine, which produced about 3 million oz. gold and 750 million lb. copper between 1998 and 2011.

Under the definitive agreement announced on Jun. 5, Thesis Gold’s shareholders will receive 2.56% of a Benchmark common share for each Thesis share at a value of 96¢ per share. Based on Thesis Gold’s 20-day volume weighted average trading price, the transaction represents a premium of 27.8% to Thesis shareholders.

If the transaction is approved and closed, Benchmark and Thesis shareholders will own about 60% and 40%, respectively, of the combined company’s outstanding shares. The company would then implement a 2.6:1 share consolidation of its common shares and change its name to Thesis Gold Inc.

Ewan Webster, president and CEO of Thesis Gold, noted that the combined company will be well-capitalized (with about $28 million in cash and equivalents) for a 50,000-metre drill program at both projects over the next 12-15 months. The drill program will focus on resource growth and exploration and will culminate in an updated resource estimate that encompasses ounces for both projects.

The new resource, he noted in a press release, will include “high-grade near surface material at the Ranch project; and an updated preliminary economic assessment (PEA) will add high-grade underground resources from Lawyer’s and the newly delineated Ranch resource.”

The 180-sq.-km Ranch project hosts more than 20 near-surface gold-copper targets and highlights from drilling include 91 metres grading 1.92 grams gold per tonne; 17.5 metres of 4.59 grams gold; and 34 metres of 19.58 grams gold at the Bonanza target. Results from the Thesis III and Steve targets include 28 metres of 6.07 grams gold (Thesis III) and 119.2 metres of 1 gram gold (Steve).

A PEA completed on the 144-sq.-km Lawyer’s project in August 2022 outlined average annual production of 169,000 gold-equivalent oz. over a 12-year mine life at all-in sustaining costs net of by-products of US$824 per ounce.

The study estimated initial capital of $493 million including a $73 million contingency and a payback of just under three years. The after-tax net present value (5% discount rate) was pegged at $577 million, with an internal rate of return of 23.5%.

Lawyer’s measured and indicated resources as of Jun. 13, 2022, stand at 67.4 million tonnes grading 1.2 grams gold per tonne, 22.9 grams silver (1.5 grams per tonne gold-equivalent) for contained metal of 2.5 million oz. gold and 49.6 million oz. silver (3.1 million oz. gold-equivalent).

Inferred resources add 4.9 million tonnes averaging 2.2 grams gold and 36.1 grams silver (2.7 grams gold-equivalent) for 345,000 oz. gold and 5.7 million oz. silver (415,000 oz. gold-equivalent).

In mid-day trading on the TSX, Thesis Gold was trading at 81¢ per share, up 6.6% on the day, within a one-year range of 62¢ and $2.00 per share. Benchmark’s shares were up 1.3% to 38¢ per share within a 52-week trading range of 30.5¢ and 86¢. Benchmark has about 254.1 million common shares outstanding for a market cap of roughly $97 million. Thesis Gold has about 65.1 million common shares outstanding for a market cap of about $53 million.


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