Platina Resources Limited (ASX:PGM) has completed the sale of Skaergaard Project in Greenland after been advised by Major Precious Metals Corp (CNSX:SIZE) that the Canadian Securities Exchange (CSE) has allowed it to close the acquisition in escrow pending their final approval.
Once released from escrow, the Skaergaard exploration licences will be transferred to Major and Platina will receive $A520,000 (C$500,000) in cash and 55 million Major shares.
Based on the last traded price of C$0.25 per share, this represents a further A$14.6 million (C$13.75 million) in value for Platina shareholders.
This deal will see Platina become a major shareholder in Major with the right to a seat on that company’s board.
Platina managing director Corey Nolan said completion of the sale process would be a win-win outcome.
“Completion of the transaction will allow Platina shareholders to share in Skaergaard’s prospective value increase.
“Major is already working hard to create value from the project including plans to produce a mineral resource estimate and Preliminary Economic Assessment completed in accordance with Canadian NI 43-101 standards, and a drilling program for summer 2021.
“A new senior geologist with significant expertise and experience in Greenland has been hired to help deliver the strategy.”
Nolan explained that the injection of new funds would be used to advance Platina’s exploration plans in Western Australia, adding that the company was seeking to expand its presence in gold and was reviewing several merger and acquisition opportunities.
Satisfying sale conditions
Under the escrow closing conditions, Major has deposited the cash payment to be paid to Platina in a segregated account and has issued the consideration shares to Platina.
The cash payment and the consideration shares will be held in escrow and not released to Platina until such time as the CSE provides its final approval, which Major is expecting shortly.
Platina’s shareholding in Major will also be subject to a 24-month time-release pooling arrangement, during which time they may not be transferred, assigned, pledged or otherwise traded.
The shares will be released from the pooling arrangement in four equal tranches, with the first release after six months and each subsequent release occurring every six months thereafter.
Subject to a mandatory four-month period escrow period, which has now started, there are provisions for accelerated share releases in connection with share price performance, changes in corporate structure or the distribution of the shares to the shareholders of Platina.