Benton Resources (TSXV: BEX) has signed a definitive arrangement agreement to spin out its Great Burnt copper-gold project in Newfoundland and Labrador into Anchor Metals Corp. The new exploration company is set to start life with roughly $10 million in the bank.
Under the deal, Benton will transfer its interest in Great Burnt to Anchor, currently a wholly owned subsidiary, in exchange for 50 million shares. Anchor will then amalgamate with privately held Silverback Metals Corp., which is raising between $10.0 million and $10.7 million in a financing held in escrow until the transaction closes.
The transaction will leave Anchor with an estimated 100 million shares outstanding at the time of its go-public. Benton will hold 50% before the distribution, with financing participants owning 33.3% and existing Silverback shareholders holding the remaining 16.7%.
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Benton plans to pass 40 million of its Anchor shares to its own shareholders at a ratio of roughly 1 Anchor share for every 7.5 Benton shares, structured as a tax-deferred return of capital. Another 10 million shares will be set aside for holders of 80 million Benton warrants, each of which will become exercisable for 1 Benton share plus approximately 0.135 of an Anchor share. If every warrant is exercised, Benton would collect around $8.3 million in cash.
Benton will also keep a 1.0% net smelter return royalty on the transferred properties that aren’t already subject to royalties. Anchor can buy back half of it for $1 million.
“We look forward to our shareholders participating in the future of Great Burnt through the new Anchor Metals public company,” said Benton CEO Stephen Stares.
When Benton first outlined the plan in July, it argued that a separately funded company could advance Great Burnt faster, and it put an imputed value of $15.0 million on the project. Silverback’s Chris Arsenault will serve as Anchor’s CEO, with Vincent Dubé-Bourgeois as executive chairman.
The deal needs approval from two-thirds of Benton shareholders, sign-off from the court and a TSX Venture listing for Anchor. Closing is now expected in the first quarter of 2027, later than the November target set out in July.
After the spinout, Benton will focus on its Dominion, Victoria West and Stoney Caldera projects, along with its hydrogen-helium properties.
Benton Resources last traded at $0.07 on the TSX Venture.
