URSA Major Minerals Incorporated (TSE:UMJ) (PINK:UMJMF) stock price nearly doubled after the company announced to have entered into a business combination agreement.
UMJ stock price added 90% on Friday as the news hit the market. The accompanying trading volume of nearly 8 million showed a huge interest from traders and shareholders.
The price gapped up since the company signed a binding letter of agreement for a business combination with Prophecy Platinum Corp. (TSE:NKL) (PINK:PNIKF).
If the deal goes through, Prophecy will issue 1 common shares for every 25 shares of Ursa, giving it a valuation of 15 cents per share. This deal should keep the market price close to the proposed one, but since its not yet a final deal the terms might still change and traders will likely try to account for this risk by keeping the actual market cap lower.
Ursa holds interest in three properties in Ontario and an option to acquire 70% interest in another one. The Porter-Baldwin property extending from the Shakespeare deposit is the one that Prophecy is most interested in.
The deal is also subject to regulatory approval. Two of the prophecy directors would be appointed to the board of Ursa upon completion. A special meeting of shareholders will be held in late May to vote upon the transaction if the deal will get stuck in process.
