San Gold Corporation (TSX:SGR) entered into a non-binding letter of intent to acquire Kerr Mines Inc. (TSX:KER) from Sprott Asset Management, LP, Braydon Capital Corp., Water Global Resource Management and others on July 21, 2014. Under the terms of the transaction, each Kerr Mines shareholder will be entitled to receive a number of common shares of San Gold for every common share of Kerr Mines held by such Kerr Mines shareholder based on an exchange ratio to be determined by the parties at a later date. In addition, each holder of outstanding stock options and common share purchase warrants of Kerr Mines will receive such number of replacement options or warrants of San Gold based upon the Exchange Ratio.

San Gold Corporation (TSX:SGR) entered into a definitive agreement to acquire Kerr Mines Inc. (TSX:KER) from Sprott Asset Management, LP, Braydon Capital Corp., Water Global Resource Management and others for CAD 38.4 million on August 19, 2014. Under the terms of the agreement, each Kerr Mines shareholder will be entitled to an exchange ratio of three common shares of San Gold for every one common share of Kerr Mines.

A break fee of CAD 1 million is payable by either San Gold or Kerr Mines in the event that either party proceeds with an alternative transaction during a specified period while the parties pursue completion of the Transaction.

The transaction is subject to certain conditions including, execution of a definitive agreement by August 31, 2014; listing of shares; dissenters rights limited; execution of support agreement; lenders approval; completion of private placement; completion of satisfactory due diligence by both parties; receipt of all necessary consents, waivers, permits, exemptions, orders and approvals, including court approval of the plan of arrangement and the approval of the Toronto Stock Exchange; receipt of fairness opinions concerning the transaction by both parties; and receipt of shareholder approval by the shareholders of San Gold and Kerr Mines. As of November 6, 2014, the shareholders of San Gold Corporation approved the issuance of up to 130,000,000 subscription receipts of San Gold in connection with proposed financing arrangement. Jennings Capital Inc. acted as fairness opinion provider for Board of Kerr Mines while Primary Capital Inc. acted as fairness opinion provider for Board of San Gold. Ernst & Young LLP (Canada) and Scarrow & Donald LLP acted as accountants for Kerr Mines and San Gold. TMX Equity Transfer Services and CST Trust Company acted as transfer agents for Kerr Mines and San Gold. Wildeboer Dellelce LLP acted as legal advisor for special committee. Equity Financial Trust Company acted as depository for Kerr Mines.

San Gold Corporation (TSX:SGR) cancelled the acquisition of Kerr Mines Inc. (TSX:KER) from Sprott Asset Management, LP, Braydon Capital Corp., Water Global Resource Management and others on December 15, 2014.