Gold X2 Mining (TSXV: AUXX) plans to carve a royalty out of its flagship gold project and hand it to shareholders, while separately pursuing a listing on a U.S. exchange.
The company said Wednesday it intends to create a 1% net smelter royalty on any future production from the Moss Gold Project in Northwestern Ontario, then spin that royalty into a wholly-owned subsidiary. Shares of the new entity would be distributed to existing Gold X2 shareholders on a pro rata basis through a plan of arrangement.
Holdings in Gold X2 itself would be unchanged by the move. The royalty shares are not expected to trade anywhere at first, though the subsidiary’s board could pursue a listing down the road.
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The arrangement still needs sign-off from the TSX Venture Exchange, regulators, courts and Gold X2 shareholders, and the company cautioned there is no certainty it will proceed.
“the company believes there is a compelling opportunity to unlock additional shareholder value through the creation of a royalty-focused entity centered on the long-term potential of this emerging district-scale asset in Northwestern Ontario,” commented chief executive Michael Henrichsen.
Separately, Gold X2 has applied to list its common shares on NYSE American, a step it framed as a way to broaden its investor base and improve trading liquidity. A ticker symbol will be announced before trading begins, subject to approval.
To meet the U.S. listing requirements, the company will seek TSXV approval to consolidate its shares at a ratio of six to one. That would shrink its roughly 606.7 million shares outstanding to about 101.1 million. The consolidation and the listing are not conditional on the royalty spin out and would move ahead regardless.
Gold X2 Mining last traded at $1.06 on the TSX Venture.
