In a deal that involves $6 million in cash and $14.8 million in shares, Breakwater Resources (TSE) will become the largest corporate shareholder in Noramco Mining (TSE). Howard Gougeon, vice-president and chief financial officer for Breakwater confirms the deal is nearly the same as the one worked out between Noramco and Battle Mountain Gold which collapsed a few weeks ago (N.M., June 6/87).
Breakwater intends to purchase 3.2 million shares of Noramco or 19.9% of its issued capital for a total consideration of $20.8 million, $6.03 million in cash and $14.8 million through the issue of 2,686,222 Breakwater shares.
Gougeon confirms Breakwater’s intent to “manage” Noramco and he believes Breakwater has plenty to offer Noramco in the area of operating experience. Although there are no plans to merge with Noramco at present, he wouldn’t rule this out as a possibility in the future.
When the transaction is concluded, two Breakwater nominees will be appointed to Noramco’s board and Bruce MacDonald from Noramco will join the board of Breakwater.
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