Courageous Lake now has a public company built around it. Seabridge Gold (TSX: SEA) has closed the spin-out of Valor Gold (TSX: VGC), the new entity created to hold its Courageous Lake gold project in the Northwest Territories, completing a separation the company first floated late last year.
The arrangement, carried out under the Canada Business Corporations Act, took effect on June 3.
Under the deal, Seabridge transferred its full interest in Courageous Lake to Valor. Shareholders receive one new Seabridge share for each share held, plus one Valor share for roughly every 1.957 Seabridge shares. That leaves 55 million Valor shares outstanding.
The reshuffle moves quickly on the exchanges. Existing Seabridge shares stop trading on the Toronto Stock Exchange and the NYSE at the close on June 4, with the new shares opening June 5 under the tickers SEA and SA. Valor begins trading the same morning on the TSX under the symbol VGC, with an OTCQB quotation in the U.S. to follow once approved.
Chair and CEO Rudi Fronk has argued that Courageous Lake was undervalued inside Seabridge, overshadowed by the much larger and more advanced KSM project. The spinout is meant to let the asset trade on its own merits.
Courageous Lake ranks among Canada’s larger undeveloped gold deposits, sitting along a 51 kilometre stretch of greenstone belt with a sizeable resource estimate. Highlights from that resource include:
- Measured and indicated resources: 11.0 million ounces (145.2 million tonnes at 2.36 g/t)
- Inferred resources: 3.3 million ounces (40.6 million tonnes at 2.52 g/t)
- Proven and probable reserves, included within M&I: 2.8 million ounces (33.9 million tonnes at 2.6 g/t)
Seabridge has previously stated that the reserve grade would rank Courageous Lake among the highest grade open pit gold projects in the country.
Valor starts life with $10 million in cash, which was generated from a $5.1 million financing conducted with Seabridge and a $4.9 million advance under a gold stream. That stream gives Seabridge the right to buy 10% of future production at a fixed US$4,000 an ounce whenever the quarterly average price tops that level.
Mining veteran Mark Ashley will lead the spinout as Valor’s CEO.
Seabridge Gold last traded at $47.70 on the TSX.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
