Following its failure to receive court approval for a proposed merger, Eastmaque Gold Mines (TSE) and Equinox Resources (TSE) recently signed a new agreement.
Under the terms of the new agreement, Eastmaque common shareholders will receive one share of Equinox for every 10 common shares of Eastmaque. In the previous offer, common shareholders could exchange eight shares for one common share of Equinox.
Terms for the preferred shareholders are unchanged from the previous offer. Every two preferred shares are exchangeable for: one Equinox common share; one warrant for the purchase of an additional Equinox common share at $3.40 for a period of four years; and one new Equinox production participating preferred share with a par value of $1.50.
The participated preferred share does not carry a coupon and is repayable from 25% of the cash flow from Eastmaque’s assets.
The British Columbia Supreme Court did not approve the previous merger proposal on the grounds that the information circular did not provide preferred shareholders with adequate information on Eastmaque’s assets.
The companies plan to hold meetings on Aug. 11 to secure shareholder approval for the amalgamation.
Equinox currently holds about 17.3% of Eastmaque’s common shares and will abstain from voting on the proposal.
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