Spin out coming?
Virginia Mines (VGQ-T) Feb 3rd, '14 has concluded an agreement with three Quebec institutional funds, including SODEMEX Developpement LP (a subsidiary of the Caisse de depot et placement du Quebec) and the Fonds de solidarite des travailleurs du Quebec, jointly with the Fonds regional Nord-du-Quebec and SIDEX LP, to finance a $28-million accelerated exploration program on the Coulon project. Virginia first transferred all interests it held in the Coulon project in favour of a newly constituted subsidiary called Mines Coulon Inc. ("Mines Coulon"). In return, Virginia received common shares of Mines Coulon for a value of $42M.
Virginia and the institutional shareholders then agreed to subscribe, over a 4-year period (2014-2017), to $28M in common shares of Mines Coulon.
Subscriptions will be completed by annual instalments of $7M in the manner described hereafter: SODEMEX $2M, the Fonds $2M, SIDEX $1M and Virginia $2M.
Subsequent to these subscriptions, the partners' respective interest will be as follows: Virginia 71.45%, SODEMEX 11.42%, the Fonds 11.42% and SIDEX 5.71%.
The institutional shareholders were granted a right to exchange 75% of their respective investment in Mines Coulon in common shares of Virginia in the case of one of the events described hereafter but no later than October 20, 2017: -- Sale of the Eleonore royalty; -- Change of control of Virginia; -- Failure by Virginia to subscribe in Mines Coulon; or -- Sale of Mines Coulon.
(hereinafter referred to as "triggering events")
The unit price of Virginia shares to be issued under an exchange will be equal to the volume-weighted average price for the five (5) trading days preceding a triggering event.
"The investment of Sodemex Developpement attests to the great potential for additional discoveries at Coulon, has declared Carl Gilbert, Investment director of Sodemex Developpement. With this investment that meets all our selection criteria, we support an experienced management team with an impressive track record". Andre Gaumond, president of Virginia, states that he "is very pleased to be associated with these exceptional partners to fully evaluate the potential of this unique project in Quebec".
In the event of the sale of Mines Coulon, the shareholders have agreed to a royalty as follows: a) the first 0.5% exclusive to Virginia; and b) the remaining balance to be divided between the shareholders in proportion to their respective interest in Mines Coulon.
Virginia will be the operator.
The transaction has been conditionally approved by the Toronto Stock Exchange.
The Coulon Project
The Coulon project holds the most important undeveloped copper-zinc-silver resource in Quebec (43-101-compliant resource estimate published on April 14, 2009: indicated resource of 3,675,000 tonnes and inferred resource of 10,058,000 tonnes). The Coulon project comprises 498 mining claims covering a surface of 24,767.12 hectares. It is host to 8 lenses and is part of one of the most important felsic volcanic belts (greater than 70 km2) ever discovered in Quebec. Last year, Virginia discovered Lens 257 (the richest one to date), which returned intersections of 9.48% Zn, 3.11% Cu and 46.16 g/t Ag over 15.7 metres (CN-13-271) and 14.65% Zn, 2.04% Cu and 35.83 g/t Ag over 7.35 metres (CN-13-273). Although relatively well located in the James Bay region, the Coulon project is nonetheless relatively far from copper-zinc smelters. It is one of the reasons, the institutional shareholders have partnered with Virginia to accelerate exploration work and grow the resources.
Virginia Mines Inc.
Andre Gaumond
President
800-476-1853 or
418-694-9832
418-694-9120 (FAX)
Virginia Mines Inc.
Paul Archer
V-P Exploration
800-476-1853 or
418-694-9832
418-694-9120 (FAX)
Virginia Mines Inc.
Robin Villeneuve
CFO800-476-1853 or
418-694-9832
418-694-9120 (FAX)
www.minesvirginia.com
info@minesvirginia.com |
