Benton Resources (TSXV: BEX) is handing its flagship copper-gold project to shareholders, clearing the deck to chase the more unusual prize of hydrogen and helium.
The company said it plans to spin out the Great Burnt Copper-Gold Project into a new public company through a letter agreement with privately held Silverback Metals Corp. The deal pegs Great Burnt at an imputed value of $15.0 million.
Under the arrangement, Benton shareholders will receive Spinco stock pro rata as a return of capital, collectively holding a 45% stake in the new company. Benton keeps a 5% shareholding and a 1% uncapped net smelter return royalty on certain claims, half of which can be bought back for $1 million.
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The move comes alongside a concurrent $10.0 million private placement, which will account for roughly a third of Spinco and leave the new entity fully funded to push Great Burnt toward expansion and, Benton hopes, fresh discoveries.
“We are thrilled to announce the spin-out of Spinco which represents another exciting milestone in Benton’s strategy to unlock value for our shareholders,” said President and Chief Executive Officer Stephen Stares. He added that Spinco “will be well financed with $10.0 M in cash to aggressively advance the project,” while Benton “retains long-term exposure to the success of Great Burnt.”
Spinco arrives with a bench in place. Vincent Dubé-Bourgeois will serve as executive chairman, geologist Chris Arsenault as chief executive, and Denis Laviolette as strategic advisor.
Benton expects to put the transaction to a shareholder vote in mid-October, secure approval from the British Columbia Supreme Court, and close in November.
Benton Resources last traded at $0.085 on the TSX Venture.
