HighGold Mining Inc (TSX-V:HIGH, OTCQX:HGGOF) said it has initiated plans to spin-out its Ontario and Yukon exploration properties into a new Canadian-focused exploration company, to be named Onyx Gold Corp.
The company said it intends to complete the spin-out by way of a plan of arrangement (POA) and apply for the listing of Onyx Gold on the TSX Venture Exchange (TSX-V).
Concurrent with the listing, it is intended that Onyx Gold will complete a non-brokered private placement to fund work programs and for general working capital.
READ: HighGold Mining says latest drill results from DC prospect at Johnson Tract underscore property's district-scale potential
"Since launching HighGold in 2019 we have made great strides in advancing our flagship Johnson Tract Au-(Zn-Cu) project in Alaska," commented HighGold president and CEO Darwin Green in a statement. “With an Indicated Resource that now exceeds 1 Moz at 9.4 g/t gold equivalent at an average true thickness of 40 meters, and a significant new satellite discovery at the Ellis Zone, the Johnson Tract project is on an excellent trajectory. The Spin-Out allows HighGold to dedicate 100% of management's effort on the important next steps at Johnson Tract of advanced exploration and aggressive exploration drilling to continue expanding the resource base along with initial permitting-related activities.”
He added: "At the same time, the Spin-Out is expected to daylight value for our Ontario and Yukon gold assets, which have been overshadowed and underexplored due to our focus and success at Johnson Tract. With more than 500 sq. km of land holdings in two of Canada's top mining and exploration jurisdictions - Timmins, Ontario and east-central Yukon's new Reduced Intrusion-Related (Snowline) Gold district - Onyx Gold will provide existing HighGold shareholders with exposure to a new discovery-focused exploration company with an exciting portfolio of Canadian assets. The intention is for Onyx to continue to maintain an association with HighGold, leveraging the strength and efficiency of our in-house technical teams under one umbrella."
Full details of the spin-out, including anticipated capitalization structure and exchange ratio for HighGold shareholders to receive shares of Onyx Gold, will be outlined in the POA that will be described once finalized in a subsequent news release and in a management information circular to be distributed to HighGold shareholders in the coming months.
The transaction will be subject to shareholder, court, and TSX-V approval, with the company targeting completion in time to take advantage of the summer exploration season.
HighGold is a mineral exploration company focused on high-grade gold projects located in North America. HighGold's flagship asset is the high-grade Johnson Tract Gold-Zinc-Copper Project located in accessible Southcentral Alaska, USA.
The company also controls one of the largest junior gold miner land positions in the Timmins, Ontario gold camp. This includes the Munro-Croesus Gold property, which is renowned for its high-grade mineralization, and the large Golden Mile and Timmins South properties.
HighGold also has 100% ownership of a group of properties in Yukon's emerging new Selwyn Basin Reduced Intrusive Related Gold district.
Contact the author at jon.hopkins@proactiveinvestors.com