Those investors who like the Voisey’s Bay deposit in Labrador as much as Inco (TSE) can continue to invest in the project through “VBN” shares, which will be issued by Inco as part of its proposed takeover of Diamond Fields Resources (TSE).
The VBN shares are now trading on a “when issued” basis on the Canadian Dealing Network at the $40 level.
Inco plans to acquire all the outstanding shares of Diamond Fields through the issuance of 0.557 of a common share of Inco per share of Diamond Fields.
Each Diamond Fields shareholder will also receive: one share in a new company formed to hold the company’s diamond assets; 0.091 of an Inco Series E convertible redeemable preferred share; and a quarter of a VBN share.
VBN (which stands for Voisey’s Bay Nickel) is entitled to a 25% “economic interest” in the Voisey’s Bay deposit and any other discoveries made on the company’s Labrador lands.
At last report, the Main Ovoid at Voisey’s Bay was estimated to contain 31.7 million tonnes grading 2.83% nickel, 1.68% copper and 0.12% cobalt. Inco recently projected the total resource for the project at 150 million tonnes.
VBN’s economic interest entitles it to 25% of the unallocated cash flow from the project. Inco plans to distribute the funds by way of dividends to the VBN shareholders.
Voisey’s Bay Nickel will have about 26 million shares outstanding, assuming the takeover offer is approved by shareholders.
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