Although the transaction is still subject to regulatory approvals and a favorable tax ruling, Cassiar subsidiary Princeton Mining is slated to become the new parent of the corporate group.
Under the proposal, common shareholders of Cassiar will receive one share of Princeton for each Cassiar share.
Cassiar President James O’Rourke said the reorganization will more accurately reflect the company’s diversification away from a single product, asbestos fibre, into copper and precious metals. At the same time, O’Rourke expects the move will enhance the group’s ability to finance future investments.
After the reorganization is completed, management anticipates that the common shares of Princeton will be a qualified investment for certain regulated insurance companies, trust companies and pension plans, a status Cassiar shares do not enjoy.
In its latest quarter ended Sept 30, Cassiar reported earnings of $10.9 million, versus $8.2 million for the comparable period in 1988. The Cassiar mine contributed $3.2 million, and Similco contributed $7.7 million during the recent quarter. Both operations are in British Columbia.
Nine-month earnings are reported as $28.7 million, more than double the $13.5 million reported last year when the Similco copper mine was included in Cassiar’s financial statements for only four months. The earnings include a $3.6-million gain from the sale of the company’s Bissett gold assets in Manitoba to Rea Gold (TSE).
Cassiar has about a 20% stake in Rea Gold which in turn has a 30% interest plus a 5% net smelter return royalty in the recently opened Samatosum silver-base metal mine near Barriere, B.C.
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