Great Bear Resources Ltd. (GBR:TSX.V; GTBDF:OTCQX) entered an agreement to spin out a 2% net smelter return (NSR) royalty on its Dixie project into a new, wholly-owned subsidiary, Great Bear Royalties Corp., it announced in a news release. The transaction is expected to close in April 2020.
For the spinout to move forward, Great Bear's shareholders need to approve it first. Specifically, of the votes cast by shareholders, 66⅔% must be in favor of the move.
Should that requirement be met and the spinout thus occur, the Canadian exploration company will transfer the NSR royalty, about $1 million in marketable securities that it owns, along with $0.5 million in cash, into the new corporation to constitute its initial assets.
Also, each shareholder, as of a particular date just before the transaction closes, will receive one share of Great Bear Royalties for each four common shares of Great Bear Resources held as of the record date.
The spinco initially will operate as a reporting issuer rather than being listed on a public stock exchange.
To create further value for shareholders through the spinco, Great Bear Resources intends to keep advancing Dixie, in Ontario's Red Lake District, the company stated.
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