Minerals explorer TomaGold’s board of directors has approved, in principle, a strategic reorganisation of the corporation’s assets, which will involve the spinning out of some assets into a new entity.
TomaGold plans to spin out its interests in the Monster Lake and Irene Lake exploration projects, in northern Quebec, into Monster Exploration, with the intent of listing the newly incorporated subsidiary on the TSX-V.
The Monster Lake deposit has a high-grade inferred resource of 1.1-million tonnes at 12.14 g/t gold, for 433 300 oz of contained gold.
Further, the corporation has also entered into two letters of intent with arm’s length parties, with respect to the acquisition by Monster Exploration of interests in two additional gold projects in the vicinity of Monster Lake: Anik, from Kintavar Exploration, and Diego from a private individual.
TomaGold will continue to hold its interests in its other projects in Quebec and Ontario.
Subsequent to, or in connection with the completion of the spin-out, TomaGold intends to pursue capital market opportunities and to consolidate its share capital.
It is proposed that the transaction be carried out by way of statutory plan of arrangement pursuant to the Canada Business Corporations Act.
Under the terms of the spin-out, shareholders of TomaGold will exchange their existing common shares of TomaGold for the same number of new common shares of TomaGold and common shares of Monster Exploration.
The number of common shares of Monster Exploration to be issued to each TomaGold shareholder under the spin-out has not yet been determined, but the TomaGold Exploration Assets are expected to be transferred at a valuation of C$22.66-million, based on an independent valuation and fairness opinion.
There would be no change in the shareholders’ holdings in TomaGold owing to the spin-out.
Concurrent with the spin-out, the corporation intends to complete a financing of Monster Exploration for minimum gross proceeds of C$8-milion.
The net proceeds of the financing will be used to fund, among other things, the working capital of Monster Exploration, exploration work and potential future acquisitions.