Canada Silver Cobalt Works Inc. (TSX-V:CCW) has unveiled the series of transactions ahead of the spinout of its Coniagas Battery Metals Inc subsidiary into a separate public company, including the distribution of around 11.75 million shares of Coniagas to company shareholders as a dividend.
Canada Silver Cobalt will acquire the shares as consideration for the impending transfer to Coniagas of the nickel-copper-cobalt Graal property in Quebec.
The proposed dividend of 11.75 million shares of Coniagas will be made on the basis of one Coniagas share and half-warrant for every 17.27 shares of Canada Silver Cobalt on a date to be selected, the company said in a statement.
Coniagas intends to apply for listing on a Canadian stock exchange and to file a non-offering prospectus with the Canadian provincial securities commissions to qualify the distribution of the Coniagas shares and warrants, it added.
Coniagas also intends to raise about C$1.25 million via a private placing by issuing up to 5 million shares at C$0.25 each.
READ: Canada Silver Cobalt says survey at Graal property in Quebec supports potential for growth
Each share will be accompanied by one warrant, which may be exercised for two years at C$0.40 per share. Coniagas intends to use the proceeds on advancing the Graal asset and for working capital.
After the dividend and the placing, Canada Silver Cobalt will hold around 36.7% of Coniagas' outstanding shares plus warrants as will Canada Silver shareholders.
Investors in the proposed placing will hold around 15.6% of Coniagas' shares plus warrants, with the balance of 11% of the Coniagas shares to be held by its directors and officers and by a third-party vendor of certain of the claims comprising the Graal property.
Frank J. Basa, CEO of Canada Silver Cobalt, will become Coniagas founding CEO and president.
"Coniagas will establish itself as a provider of MAAS (Metal as a Service) to the global EV battery market," he said.
"Early exploration of the spinout Graal property, at 6,100 hectares in Quebec, has already yielded significant results in nickel, copper, and cobalt over a 6-kilometer strike length.
"Historical drilling had previously indicated a potential target of near-surface tonnage of 30-60 million tonnes, with a grade range of 0.60-0.80% nickel, 0.30-0.50% copper and 0.10-0.15% cobalt in the MHY section.
"This estimation does not take into account any potential at depth and excludes newly discovered mineralization," he added.
"Coniagas is well-positioned to deliver ongoing results in the coming months at the Graal property in Quebec."
Basa also noted: "Canada Silver Cobalt will become a focused, high-grade silver and gold exploration company in the historic Cobalt camp and on the Cadillac-Larder-Lake Break where millions of ounces of silver and gold have been mined over a hundred-year time frame."
The company also noted that the "quantity and grade" of the potential target at Graal was conceptual in nature, and there had been "insufficient exploration" to define a mineral resource.
Contact the writer at giles@proactiveinvestors.com