Tintina Mines Ltd. entered a non-binding letter of intent to acquire the shares of NSR Resources Inc. it does not already own, according to a Sept. 26 release.
Tintina currently holds 1.1% of NSR. Under the terms, Tintina is offering to exchange 0.729756389 shares for each NSR share. Tintina expects to issue 19,578,000 shares in the deal, representing about 43% of the combined entity.
The proposed deal will allow Tintina to use NSR's financial resources to develop its Red Mountain molybdenum project and the Watson Lake claims, both in Yukon. NSR recently agreed to sell its Rand gold property in Quebec to Canadian Malartic GP for US$5 million and a 2% net smelter royalty. As of June 30, NSR has a cash balance of C$828,174.
NSR shareholders are expected to receive greater liquidity by holding Tintina's tradable shares in the TSX Venture Exchange.
The transaction will be completed through a three-cornered amalgamation with a new Tintina subsidiary. Upon closing, NSR will become a unit of Tintina. Current Tintina executives are expected to serve as the new entity's directors and officers.
The planned merger is subject to a definitive agreement and approvals by the TSX-V, the boards of the two companies, and NSR shareholders, who will vote on the proposal during a special meeting on Nov. 27.
