Goldstrike Resources Ltd. proposes to spin off its six projects in the White Gold district of Canada's Yukon Territory to focus on its partnership with Newmont Mining Corp. on the early stage Plateau gold project in the same region.
According to a May 16 release, Goldstrike entered into an arrangement agreement with its subsidiary Luckystrike Resources Ltd. under which Luckystrike will indirectly acquire Goldstrike's Lucky Strike, BRC, Hotspot, Bull's Eye, Gold Source and King's Ransom properties.
The deal will see Goldstrike shareholders receiving 1 common Luckystrike share for every 7 common Goldstrike shares held.
Ahead of the deal closing, Goldstrike will invest C$2.5 million in Luckystrike by subscribing for 8,333,334 units at 30 Canadian cents apiece. Each unit will consist of 1 common Luckystrike share and 1 warrant, exercisable at 60 cents per share for three years and subject to acceleration. The agreement could also include an additional private placement of subscription receipts amounting to up to C$2.5 million.
Goldstrike, which will apply to list the Luckystrike shares on the TSX Venture Exchange, believes that the deal will maximize value for shareholders, enabling the stand-alone development of the six projects while giving shareholders the ability to participate in both companies.
Upon completion of the spinoff and subject to certain approvals, Goldstrike will own about 24% of Luckystrike's outstanding shares, with Goldstrike shareholders holding the remainder.
Luckystrike's board is expected to comprise William Chornobay, Yilu Zhang, Terrence King, Reimar Koch and Ewan Webster, with Chornobay acting as president and CEO and Zhang acting as CFO. King now serves as chairman, president and CEO of Goldstrike, Chornobay serves as COO and Zhang serves as CFO.