The board of exploration company Kootenay Silver has approved a spin-out of 80% of the company’s Canadian assets to shareholders, leaving the company to continue with the development of its Mexican assets.
Kootenay believes that having a separately funded early-exploration business will accelerate development of its British Columbia assets.
"We believe the spin-out of the Canadian Assets will be very beneficial to shareholders. Among other benefits, it will unlock the value of the Canadian Assets by allowing it to be developed separately, by a skilled and experienced management team, and it will allow our shareholders to own shares in two companies,” said Kootenay president and CEO James McDonald.
McDonald will manage Spinco as president and CEO and Rajwant Kang will be CFO.
Kootenay's current shareholders will receive Spinco shares by way of a share exchange, pursuant to which each existing common share of Kootenay will be exchanged for one new common share of Kootenay and 0.04 of a Spinco share.
Upon receipt of approval from the shareholders of Kootenay and Supreme Court approval of the spin-out, Kootenay's board will determine a trigger date for Spinco to complete a financing by way of private placement, rights offering or other means, and apply for a listing on the TSX-V or another Canadian stock exchange.
.