Nevada Silver Corporation (TSX-V:NSC) has provided an update on the Emily manganese project, which is held by its indirectly owned US subsidiary, North Star Manganese Inc (NSM).
The Toronto-based resource company said it has been and continues to be focused on its Corcoran silver-gold project in Nevada. In December last year, the firm revealed that it was evaluating its options for financing and commercializing the Emily manganese project, including initiating a spinout of NSM, or exploring a joint venture based on tax and securities law advice.
The review is ongoing, but the company said it will conduct an offering of NSM securities on a private placement basis to fund NSM for any value realization transaction. The funds will also be used for interim exploration financing and general working capital, said the company.
The offering will consist of up to 3 million shares of NSM at a price of $0.25 per share for gross proceeds of up to $750,000. Prior to completing the financing, NSM will split its shares based on 2.3483 new shares for each currently outstanding share. As a result, the outstanding shares of NSM will increase from 12.78 million shares to 30 million shares prior to completion of the financing.
READ: Nevada Silver announces plans to raise $7.02M for exploration on Nevada land package
Once the financing is completed in full, NSM will have 33 million shares outstanding. If the NSM financing is completed in full, and a value realization transaction is not completed, the company's indirect shareholding in NSM will be reduced to a 90.9% indirect holding.
The financing is subject to getting the necessary approvals from the TSX Venture Exchange.
Separately, the company said it acquired 2,800 acres of unpatented and patented claims 15 kilometres (km) southwest of the company's Corcoran silver-gold project and north-east of Tonopah in central Nevada.
As part of the land claims acquisitions, the company's indirect wholly-owned subsidiary North American Silver Corporation (NAS) acquired five patented lode mining claims in Nye County, Nevada covering around 69.88 acres.
The company said the price for the optioned property is US$10,000 per acre, or a total of US$700,000. NAS has the option to defer payment for up to five years by paying cash, or issuing shares on the anniversary dates of the option and purchase agreement, or until February 11, 2027, in the following amounts:
- Pay on the effective date US$30,000 of common shares at a deemed price of C$0.32 per share
- On the first anniversary of the effective date, pay US$35,000 in cash or common shares at a price per share equal to the 10 day volume-weighted average price (VWAP)
- On the second anniversary of the Effective Date, pay US$40,000 in cash or common shares at a price per share equal to the 10 day VWAP
- On the third anniversary of the effective date, pay US$45,000 in cash or common shares at a price per share equal to the 10 day VWAP
- On the fourth anniversary of the effective date, pay US$50,000 in cash or common shares at a price per share equal to the 10 day VWAP
- On the fifth anniversary of the effective date, the company must pay the purchase price to acquire the optioned property
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive