Franco-Nevada spins out subsidiary via prospectus

Euro-Nevada Mining, a wholly- owned subsidiary of Franco-Nevada Mining, recently filed a preliminary prospectus with regulatory authorities in connection with the spinout of Euro-Nevada to existing Franco-Nevada shareholders.

Under the prospectus, a dividend of one Euro-Nevada share will be paid for each 25 shares of Franco- Nevada held to all Franco-Nevada shareholders.

The company says a record date for the dividend payment will be announced soon. At that time, Euro-Nevada will have no assets and Euro-Nevada shares will have a nominal value of 1 cents .

Franco-Nevada says it will transfer all of its non-producing assets to Euro-Nevada at their fair market value.

Euro-Nevada says it will pay for this acquisition and finance its future requirements by offering its shareholders rights to purchase 12 shares for $1.05 each for each share of Euro-Nevada received via the dividend.

According to the company, residual shares resulting from unexercised rights will be underwritten by Wood Gundy and Thomson Kernaghan and Co.

For each share received via dividend, Euro-Nevada shareholders will also receive six one-year warrants to buy another share of Euro- Nevada at $2.00 each.

Following the offering, Euro- Nevada will have approximately 6.7 million shares outstanding plus warrants to purchase a further 2.9 million common shres.

In addition to satisfying the costs of acquiring Franco-Nevada’s properties, funds raised will be used to drill and develop five Nevada prospects, three of which are in the Carlin Gold belt.

Euro-Nevada also intends to seek new royalty interests on producing precious metal mines and prospective producers in Nevada.

Franco-Nevada will retain its net smelter royalty and net profit interests in the Post Mine, Bazza Mine and gold Strike Mine operated by American Barrick Resources.