The Sprott Foundation evidently is looking to unload a sizeable portion of its ownership in Garibaldi Resources (TSXV: GGI). It was announced this morning that the company would be disposing of 23.7 million shares of the company via a transaction with Eskay Mining Corp (TSXV: ESK), whom is set to take a 19.5% stake in Garibaldi.
The transaction will see Eskay take possession of 23.7 million shares of Garibaldi, currently valued at $10.8 million, in consideration for the issuance of 4.2 million units. Each unit, priced at $2.56 per unit, contains one common share and one common share purchase warrant.
Each warrant issued is valid for a period of two years following closing of the transaction, and contains an exercise price of $2.82 per common share. Eskay can also force the acceleration of the warrant in the event that its equity closes above $3.72 for a period of twenty consecutive days.
Following the close of the transaction, it is believed that the Sprott Foundation will continue to hold 15.6 million shares of Garibaldi, based on filings made by Eric Sprott in December.
Eskay Mining last traded at $2.82 on the TSX Venture.
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