Almadex Minerals Ltd.'s board approved a business reorganization that will see the spinout of its early stage exploration projects, royalty interests and other noncore assets into a new company, Almadex said Feb. 26.
While the El Cobre copper-gold project in Mexico will remain with Almadex, the spinoff company, or Spinco, will hold 18 other exploration projects, a 1.75% net smelter royalty over El Cobre, a 2% NSR over Almaden Minerals Ltd.'s Tuligtic gold-silver project in Mexico and 15 other royalties over exploration projects in Mexico, Canada and the U.S.
Spinco will also own 4 million Almadex shares and will be given sufficient working capital to satisfy stock exchange requirements, as the spinoff company is intended to be listed on the TSX Venture Exchange. As part of the reorganization, current Almadex shareholders will receive 1 Spinco share for each Almadex share held.
According to Almadex, the reorganization will allow the company to focus on developing El Cobre and will unlock the value of its noncore assets. The spinoff remains subject to certain conditions, including approvals from the TSX-V and Almadex shareholders.
Meanwhile, the company signed a subscription agreement with Newcrest Mining Ltd., under which the latter's Newcrest International Pty. Ltd. unit will invest about C$19.1 million in Almadex through a private placement. The Newcrest unit will acquire 14,025,312 common Almadex shares at C$1.36 apiece.
The placement's closing is conditional on the completion of the proposed business reorganization. This investment deal will give Newcrest a 19.9% shareholding in Almadex but no stake in Spinco.