Impact: Positive
Cerrado announced that it has agreed to acquire Ascendant Resources (TSX:ASND, Not Rated) in an all-stock deal for one CERT share per 7.8 ASND shares. At CERT’s last close, this implies a purchase price of C$0.063/ASND share, slightly above ASND’s C$0.06/sh last-close pre-announcement, valuing ASND at ~C$12M. A Jul/23 FS for Ascendant’s 80%-owned Lagoa Salgada VMS polymetallic (Zn-Cu-Pb-Au-Ag) project (LS) in Portugal outlined a 14-year U/G mining operation for the Venda Nova deposit with a US$147M NPV8% and a 39% IRR (both post-tax). In our opinion, this is a positive transaction for Cerrado and Ascendant. Through the deal, Cerrado would acquire an advanced project, including critical minerals and precious metals, with a post-tax US$147M NPV8% for just ~C$12M (and US$18M in long-term debt). For Ascendant shareholders, the deal creates a larger combined entity with sufficient cash to move Lagoa Salgada forward.
