Toronto-based American Eagle Gold Corp. AE-X has launched an unsolicited $31-million takeover offer for Pacific Booker Minerals Inc. BKM-X, the Vancouver company that owns the long-stalled Morrison copper-gold project in British Columbia.
American Eagle, which is backed by Perth’s South32 Ltd., Vancouver’s Teck Resources Ltd. and billionaire financier Eric Sprott, said in a release on Tuesday it is offering 1.41 common shares worth $1.76 for each Pacific Booker security, a 31-per-cent premium to Monday’s closing price.
Shareholders have until July 29 to tender. American Eagle needs to obtain 90 per cent of the shares to fully take over the company.
Pacific Booker started development work on the Morrison project in 1997, but it stalled more than a decade ago owing to the company’s failure to obtain an agreement with Lake Babine Nation (LBN).
American Eagle, which has a copper-gold project near to Morrison, said it had attempted talks with Pacific Booker’s board for two years. However, “in the absence of any constructive engagement,” it decided to take the deal directly to shareholders.
“What this project needs is a fresh face, a fresh approach, fresh capital, and that’s what we’re bringing to the table,” American Eagle chair Stephen Stewart said.
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Pacific Booker chief executive John Plourde said in an interview he is open to the American Eagle bid, but at a significantly higher price.
“We’re not opposed to the takeover, but we don’t want half a sandwich,” he said.
Mr. Plourde pointed to 2012 when the stock hit a high of around $15 a share. At the time, the company was confident it would be able to put Morrison into production with the support of LBN, and after it filed a technical report showing the financial projections were promising.
Mr. Stewart said that while he respects Mr. Plourde’s opinion on value, his view isn’t realistic given Pacific Booker’s inability to move the project forward owing to the strained relationship with LBN.
Morrison is located within LBN’s traditional territory, near Smithers, B.C., about 1,150 kilometres northwest of Vancouver. The First Nation has opposed the project in part over concerns about untreated liquid waste from the mine potentially endangering sockeye salmon spawning grounds, thereby threatening its food security. B.C.’s Ministry of Environment and Parks told Pacific Booker in 2024 that it needed to win support from LBN for the project to move forward.
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American Eagle, which has worked with LBN while developing its adjacent copper and gold NAK project, said it has the support of the First Nation to pursue the acquisition and “reset engagement” on the Morrison project.
Even if American Eagle doesn’t obtain enough shares to take over Pacific Booker through the tender offer, gaining a significant stake in Pacific Booker could allow it to launch a proxy fight.
Acquiring Pacific Booker could potentially allow American Eagle to combine NAK with Morrison. The two projects are located about seven kilometres apart and could benefit from shared infrastructure, as well as co-ordinated permitting and technical work, American Eagle said it its release.
Mr. Stewart said that NAK would remain the company’s priority project no matter the outcome. Still at the exploration stage, a mineral resource estimate is expected in 2027 with a preliminary economic assessment to follow, and eventual mine production in the 2030s.
Morrison was discovered by Noranda Exploration, a subsidiary of Noranda Inc., in 1962. Pacific Booker started work on the project in 1997 and by May, 2024, had spent $43-million on it. A 2009 feasibility study indicated a mine life of 21 years, and capital costs of $517-million. At the time, the price of both copper and gold were trading at significantly lower levels.
Shares in Pacific Booker rose by 34 per cent to close at $1.81 apiece on the TSX Venture Exchange on Tuesday.