Galactic/Can-Pacific in Chinese venture

Galactic Resources (TSE) is teaming up with another Vancouver company, Can-Pacific Rare Earths, to conduct exploration in China.

The new company Galactic Resources China, will attempt to strengthen the development of Chinese mining joint ventures and operate with two wholly-owned subsidiaries: Can-Pacific and Tian Shan Resources.

Under a financing agreement, Galactic will own slightly more than 50% of Galactic China while Can- Pacific’s shareholders retain the balance of the shares.

The agreement allows Galactic to recover the principal and interest of loans made to Can-Pacific out of the proceeds of future Galactic China financings.

Alternatively, it could convert into Galactic China shares at a predetermined price which would result in Galactic owning about 67% of the new company.