Shareholders of Corona (TSE) will be asked to approve a proposed 1-for-2 consolidation of the company’s subordinate voting shares and common shares and a change in name to International Corona Resources.
The issue will be on the agenda for Corona’s forthcoming annual and special general meeting set for May 31. The company said the name change is a result of legal requirements, and will also reflect the expanded geographical scope of its operations.
In a recent letter to shareholders, Corona President Peter Steen released details of a proposed reorganization that could see the company’s businesses structured into two separate public companies, a gold company and a non-gold company.
“Management believes that the separation of Corona’s assets into publicly traded gold and non-gold companies will be beneficial to all of its shareholders,” Steen said.
He added that a subcommittee of the board of directors was appointed to develop a definitive restructuring plan “as soon as practicable, with a view to implementation by the end of the third quarter.”
The idea isn’t new, and represents a variation of a proposal made in 1990 when Corona sought to consolidate its direct and indirect interests in the Eskay Creek project with its other gold assets.
Corona said Placer Dome’s (TSE) acquisition of a 45% interest in Stikine Resources “frustrated” its previous plans to complete a business combination of Stikine and Prime Resources Group (TSE), each of which owns 50% of Eskay Creek.
The plan also calls for Corona to have a single new class of common shares carrying one vote per share, while the non-gold entity would have two classes of shares (multiple voting and subordinate voting).
In the meantime, Corona said it is continuing efforts to reduce its debt. The company’s foray into Eskay Creek was financed by incurring about $100 million in new debt. N13
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