Rayrock shelves reorganization plan

A reorganization plan that would have consolidated Rayrock Yellowknife Resources (RAY-T) with two affiliated companies did not receive enough support from shareholders, thus forcing Rayrock management to go back to the drawing board.

Rayrock withdrew its proposal at a Dec. 29 shareholders’ meeting, announcing that management had not received enough proxies from minority shareholders to ensure a vote in favor of the plan. Management also withdrew a proposal for a new stock option plan and another that would have allowed the company to issue subordinate voting shares to Rayrock Chairman David Crombie as a bonus.

Under the reorganization proposal, shareholders in Inter-Rock Gold (IRO-T) and Minera Rayrock (MRN-T) could have traded for shares in the new company, Pyx Resources, at rates of one Pyx share for every 5.7 shares of Inter-Rock, and one Pyx share for every 7.1 shares of Minera Rayrock. Minority shareholders of both those companies approved the share swap.

Rayrock shareholders would have received a share dividend of one Pyx share while retaining their Rayrock shares. Rayrock would have become a holding company, with a 37.5% stake in Pyx. Pyx would have taken over all the group’s mining and mineral exploration assets, including: Minera Rayrock’s Ivan copper mine in Chile; Inter-Rock’s interest in the Daisy gold mine in Nevada; and Rayrock’s interests in the Daisy, Dee and Marigold gold mines in Nevada, plus its exploration properties.

The companies will follow their 1998 business plans until Rayrock management has drawn up a new consolidation proposal for the shareholders.