Braveheart Resources Inc. entered into a definitive agreement to acquire the shares of Purcell Basin Minerals Inc., which is being restructured, following a plan of arrangement signed Oct. 11.
Purcell owns the past-producing Gallowai Bul River copper-gold-silver mine in southeast British Columbia, which is on care and maintenance.
The plan remains subject to approval by Purcell's creditors and the British Columbia Supreme Court, which the company expects by Nov. 19.
Braveheart will settle all of Purcell's priority obligations, expected to be within C$1.5 million, and will issue 10 million shares and 10 million warrants to CuVeras LLC, one of Purcell's two secured creditors.
The company said Oct. 18 that it will purchase CuVeras' senior secured position for C$6 million in the form of a convertible debenture, which will mature three years from the date of issuance. If fully converted into common shares, 13.2 million common shares will be issued to CuVeras.
MacMillan Group, Purcell's second secured creditor, will receive C$2.5 million to release all claims and settle litigation related to Purcell and CuVeras.
Purcell's unsecured creditors will be entitled to receive 30% of their claimed values in shares. The company estimated the cost of the settlement of proven claims to be about C$390,000, and if all the claims are proven, a total of about 3.9 million shares will be issued to the unsecured creditors.
Within 90 days of the court approving the plan, Purcell's shareholders will be given an offer to acquire up to 16.5 million units of Braveheart.
Braveheart CEO Ian Berzins said that after the deal closes, the company plans to renew the permitting process for Gallowai Bul River and would seek to amend the current mine permit to allow for surface and underground tailings deposition. The company also plans to seek an increase in the mill throughput rate to optimize the current mill infrastructure.