Nevada King Gold, a company based in Canada, has recently made a strategic decision to reorganize its business by spinning out its non-Atlanta claims portfolio to a subsidiary called SpinCo. This means that Nevada King will continue to focus on the Atlanta Gold Mine Project while SpinCo will manage a significant mineral claim portfolio in Nevada, US, consisting of over 193,000 acres of claims along the Battle Mountain Trend, including historical exploration sites with high discovery potential.
As part of the agreement, Nevada King shareholders will receive shares in SpinCo based on their existing holdings in Nevada King, without affecting their stake in the company. SpinCo will not be listed on a public stock exchange but will operate as a reporting issuer.
One of the key aspects of the deal is that Nevada King will grant a 3% net smelter return (NSR) royalty on all gold and silver production from the Atlanta resource area to SpinCo. This royalty will also apply to the core ‘Bobcat’ claims after the initial capped royalty period.
However, the completion of the spin-out is subject to approval from Nevada King shareholders, the British Columbia Supreme Court, and the TSX Venture Exchange. Nevada King plans to seek an interim order from the court to convene a shareholder meeting for the approval of the transaction.
CEO Collin Kettell expressed his enthusiasm about the reorganization, stating that creating a separate company focused on Nevada King’s claims along the Battle Mountain trend will lead to a growth-focused narrative with a significant land position in a prolific gold mining area. He highlighted the potential for exploration upside and optionality from multiple properties within the portfolio, considering the strategic location near other productive mines in North America.
Overall, this move is expected to streamline operations, create more focused entities, and unlock the value of the extensive mineral claim portfolio held by Nevada King, setting the stage for future growth and exploration opportunities in the region.