Granges selling Trout Lake stake

A new corporate focus on precious metals has prompted Granges (TSE) to sell its 29% interest in the Trout Lake mine in Manitoba to Hudson Bay Mining and Smelting.

Hudson Bay, which currently owns a 44% interest in Trout Lake, will pay $33 million cash plus working capital adjustments for Granges’ interest. The sale is subject to a 90-day right of first refusal held by Manitoba Mineral Resources, which owns the remaining 27% interest in Trout Lake. Granges expects to record a gain of about $12 million on the sale and notes that the company has enough historic tax credits to shelter the gain. The sale will add about $1 per share to Granges’ liquid assets. The company currently has about 60 cents per share of net cash and 34.2 million shares outstanding. Its major remaining asset is in the form of 13.6 million shares (50.5% interest) of Hycroft Resources & Development (TSE).