Essex Minerals Inc (CVE:ESX) (OTCQB:ESXMF) (FRA:EWX1) has elected to be Zola Minerals Inc's exclusive financing partner for a new streaming and royalty company, with a focus on renewable energy.
Essex said the new company will be funded separately with the founding shares in the new venture to be distributed pro-rata to Essex shareholders. A meeting of shareholders has been called for June 10, 2021, to approve the capital distribution.
The company noted that Zola has secured exclusive access to a pipeline of long-life renewable energy streams and is in advanced negotiation on additional streams in the renewable energy and metals sectors.
READ: Essex Minerals inks financing agreement with Zola Minerals to fund future royalties and streaming deals
Essex said it is arranging financing for the streaming venture as follows:
- Essex is forming a new subsidiary called Optegra Capital Corp to which it will assign its rights under the Framework Financing Agreement with Zola announced on March 31, 2021;
- Optegra plans to raise up to $50 million to fund the initial streams, after which it will file a non-offering prospectus with the British Columbia Securities Commission and seek a new listing as a Tier 1 investment company on the TSX Venture Exchange;
- Optegra will also have the rights to acquire Zola's current and future rights to other streams being negotiated in the renewable energy, battery, and precious metals sectors;
- It is proposed that about $5.6 million in capital will be returned to existing Essex shareholders through the distribution of Optegra shares. The capital distribution is the equivalent of $0.20 per Essex share and will occur once the Optegra prospectus is filed and the exchange has approved the listing; and
- It is anticipated that Essex shareholders will hold about 10% of Optegra after the capital raise. However, the final capital structure and the respective interests of Essex and Zola will be based on legal and tax advice for each party and will be subject to approval of the exchange and the independent directors of Essex.
Essex said it will remain focused on its existing Australian gold exploration joint venture projects, with budgets and work programs for the 2021 field season currently being finalized.
The record date for voting on the Optegra share distribution is May 4, with shareholders being asked to approve the distribution as a special resolution at the June 10 shareholders meeting.
"We are excited that we are able to provide Essex shareholders with this special dividend of shares in a new and exciting streaming and royalty company, with a particular focus on income from renewable energy and battery metals alongside high alpha returns from gold,” said Essex CEO Paul Loudon.
"The Optegra shares will have the potential to provide long-term capital growth for Essex shareholders, while Essex shares themselves will continue to provide shareholders with the potential to benefit from the significant upside that a major gold discovery would bring."
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