Nevada King To Focus On Atlanta Gold Project, Spinout All Other Assets
Nevada King Gold (TSXV: NKG) has entered into an agreement for a strategic reorganization. The move will see the company proceed with a previously proposed spin out of its assets into a new company, save for the Atlanta Gold Mine project, which Nevada King will be solely-focused on on a go-forward basis.
The arrangement is expected to result in the creation of two specialized explorers. While Nevada King will be focused on Atlanta, the spinout will focus on its massive portfolio of gold claims within the State of Nevada. With claims covering over 193,000 acres, the spinco is expected to be the third largest mineral claim holder in the State, after Nevada Gold Mines and Kinross Gold, with its main assets including the Lewis, Iron Point, and Horse Mountain-Mill Creek projects.
As part of the spinout, the new entity will also hold a 3.0% net smelter return royalty on gold and silver production from the Atlanta project. The royalty applies to both the current resource area as well as non-core claims that surround the project. The royalty is expected to take effect on the core resource area once the existing 3.0% royalty, which is capped at 4,000 ounces, is paid out.
Current shareholders of Nevada King are expected to receive one share of the SpinCo for every 30 shares of Nevada King currently held. The SpinCo is expected to be a reporting issuer, however it does not plan to immediately list on an exchange.
Approval of the spinout remains subject to the approval by shareholders. The company currently expects the spinout to be completed in late July.
Nevada King last traded at $0.305 on the TSX Venture.
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