Gold-producer Belmoral owns 17% of Wrightbar, whose principal land holding, the Bourlamaque gold project, adjoins Belmoral properties at Val d’Or, Que.
Earlier this year Wrightbar asked Belmoral to close up the Bourlamaque project, which has been on a care-and-maintenance basis since July, 1988, and has undergone about $13.5-million worth of exploration work.
The Bourlamaque property hosts reserves of about 300,000 tons grading 0.17 oz gold per ton. Two zones with gold mineralization have been identified and a decline ramp has been dug to about 500 ft (vertical).
Under the terms of the proposed amalgamation, Wrightbar would become a wholly-owned subsidiary of Belmoral. Shareholders of Wrightbar, other than Belmoral, would receive one common share and one warrant of Belmoral for every seven common shares of Wrightbar.
Each warrant would be exercisable for two years at $1.20 for one Belmoral share. It is anticipated Belmoral would issue about 1.4 million shares and a similar number of warrants in the transaction.
The plan is subject to the signing of a definitive agreement and obtaining a fairness opinion, as well as the approval of Wrightbar’s shareholders and the various regulatory authorities.
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