Pelangio to create spin-off

Tired of feeling neglected by the market Pelangio Mines (PLG-T) announced it will spin-off some of its assets into a separate company.

The Milton, Ontario-based company says it aims to address the discount in its share price, which, it says, “has not accurately reflected the company’s holding of 20 million shares in Detour Gold Corporation.”

It also says the move will improve the market’s valuation of its gold properties in Ghana.

The markets initial reaction was positive, as Pelangio shares grew 11% or 45 to $4.54 on nearly 1.5 million shares traded.

Once separated, one corporation will hold roughly 19 million of the 20 million common shares of Detour Gold (DGC-T) that Pelangio holds. In all Pelangio currently holds a 49.4% stake in the company and its flagship Detour Lake gold project in northern Ontario.

The other corporation will hold the remaining assets the most significant of which are in Ghana — and the remaining 1 million shares of Detour Gold.

Pelangio says it does not have plans to sell the 1 million shares that corporation will retain.

Existing Pelangio shareholders will get the same stake in the newly formed company that they currently have in Pelangio.