Barytex plans reorganization

A proposed combination with private company Romanex Resources would result in a change in control for Barytex Resources.

The reorganization calls for Sutton Resources (VSE) to subscribe for 1.75 million shares of Barytex at 28 cents each, giving it a 20% interest in the company.

Sutton will have a right of first refusal on an ongoing basis to participate in future financings of Barytex in order to maintain its 20%. In addition, Sutton is entitled to back-in for a 50% interest in any of the company’s properties following a pre-feasibility study. To do so, it must complete a final feasibility and arrange financing.

Barytex will be controlled by Roman Shklanka, Theodore Muraro and John Nugent, all of whom have had recent dealings with Sutton, including the acquisition of nickel concessions in Tanzania and gold concessions in Guyana. Nugent said the combination of the two companies resulted from Romanex’s acquiring the Mel lead-zinc-barite property in the Yukon from Breakwater Resources (TSE).

Breakwater retains a 5% net profits interest in the property, or it can back-in for a 15% participating interest upon completion of a positive feasibility.

Nugent noted that Barytex has a 10% net profits interest in Mel as well as the right to acquire a 5% participating interest on completion of a feasibility. A combination with Romanex would therefore make sense, he added. Barytex had been listed on the Vancouver Stock Exchange but was halted last year after being declared inactive.

The combined company will continue exploring and developing Mel as well as pursue other exploration-stage prospects in North America and elsewhere. Preliminary reserves at Mel are about 5.2 million tonnes grading 7.86% zinc, 2.09% lead and 48.98% barite.