Already the owner of 36.7% of the outstanding shares of Goldnev Resources (VSE), Prime Equities (VSE) plans to acquire the balance under a recently announced takeover offer.
Prime is offering Goldnev shareholders five common shares of Prime Equities in exchange for every four Goldnev shares held.
In addition to the 3.8 million shares already owned (equal to 36.68%), Prime owns warrants to purchase up to 1.2 million shares (730,000 at 68 cents and 470,000 shares at $1.28). Goldnev also agreed to settle $260,000 in debt to Prime through the issuance of 477,942 shares which will increase Prime’s holdings to 39.5% of the company.
Prime’s offer is open until Aug. 9 and is not contingent on a minimum tender. Odlum Brown has been retained to prepare an independent evaluation of the offer.
Goldnev’s major asset is a 50% interest in the recently commissioned Goldstream copper-zinc mine near Revelstoke, B.C.
The underground mine is expected to produce an average of 35.8 million lb. copper and 6.6 million lb. zinc per year over its current 5-year life.
Prime Equities recently traded at the 69-cent level giving the offer a value of approximately 84 cents, a 30% premium to Goldnev’s price at the 65-cent level.
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