CBR Gold Corp. Feb. 4 said its board of directors has approved in principle, a spin out of its Canadian and Australian gold assets.
CBR Gold Corp. intends to change its name to Niblack Mineral Development Inc. (NIB), which will retain its interests in the Alaska volcanic massive sulfide exploration properties located in Southeastern Alaska (Niblack, Ruby Tuesday and Khayyam) as well as an extensive proprietary database focused on this region.
The company will transfer its 100 percent-owned Canadian and Australian assets – including the high-grade Three Bluffs deposit in Nunavut, the Jaurdi Hills project in Western Australia and Toro Drilling Services Pty. Ltd. – to a newly formed subsidiary, North Country Gold Corp. (NCG) in exchange for NCG shares. CBR Gold will then distribute the North Country Gold shares to its shareholders on a 1:1 basis.
CBG currently holds about C$9 million in working capital, marketable securities and equipment, which will be allocated between Niblack Mineral Development and North Country Gold pursuant to the transaction.
“Niblack and Three Bluffs are outstanding exploration projects, each with potential to produce in the near to medium term. Our joint venture partner, Heatherdale Resources Ltd., is sole funding exploration at Niblack and has the right to earn up to a 70 percent interest by funding it through to feasibility. Three Bluffs, on the other hand, is 100 percent owned by us and requires significant exploration to advance the project. Therefore, we feel that it would maximize shareholders’ value to spin out our other assets so that shareholders hold an equal number of shares in two reporting issuers with distinct flagship projects that have unique prospects and requirements for success,” said John Williamson, president and CEO of CBR Gold.
The company is working with its financial and legal advisors to finalize the structure and feasibility of the transaction. If the requisite approvals for the transaction are obtained, CBR will reduce its share capital in an amount equal to the North Country shares owned by CBR Gold and will distribute the North Country shares to shareholders as a return of capital.
Details of the transaction will be set out in a proxy circular to be provided to shareholders in connection with a special meeting, presently scheduled for March 24, 2010, at which approval for the transaction will be sought.
