Amax to up stake in Canamax Res.

In connection with the plan, Canamax has asked the Toronto and Montreal stock exchanges to allow it to issue up to 3.2 million shares to Amax Gold. If the plan is approved by Canamax shareholders at a special meeting Dec 21, Amax Gold’s stake in Canamax would increase to 49% from 42.6%.

Under the terms of a financing agreement with Amax Gold, the additional shares will be issued at a price equal to 6% below the weighted average price at which Canamax shares traded on The Toronto Stock Exchange during a 20-day period starting Oct 19.

In bid to facilitate the repayment, Amax Gold has agreed to set a minimum price of $2.25 per share.

Canamax says the transaction won’t go ahead unless it receives the approval of the majority of the shares held by shareholders, other than Amax Gold, present in person or represented by proxy at the special meeting.

At presstime, Canamax shares were trading at $2.65 on The Toronto Stock Exchange in a 52-week range of $2.20-6.88.

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