Vancouver – Terra Ventures (TAS-V) wants to divvy up its property interests into two companies. Arguing it isn’t getting value for assets beyond its 10% production carried interest on Hathor Exploration‘s (HAT-V) Midwest Northeast project, Terra says it plans to spin-off all its other assets into separate company.
Into a new company, that it plans to list on the Venture exchange, Terra would house its 100%-owned Lac Kachiwiss uranium property in Quebec, a 10% production carried interest on uranium properties in the Athabasca Basin held by Titan Uranium (TUE-V), a 2% net smelter return royalty on uranium properties owned by Solitaire Minerals (SLT-V) and, finally, what Terra expects will be a 51% interest in the Novus Gold‘s (NOV.H-V, VGN-F) REN gold property in the Northwest Territories.
The new company will also have cash holdings of about $5 million.
Terra’s sole property interest would become the 10% stake in the Midwest Northeast project in the Athabasca Basin, Sask.
To go ahead with the proposed spin-off, two thirds of shareholders must approve the plan in a vote scheduled for early 2010. If shareholders give it the green light then they will get one share in the new company for every Terra share they own. Terra has about 53 million shares outstanding.
“The spin-off transaction is designed to improve the identification and valuation of specific mineral property interests,” Terra argues in a press release, “to enhance Terra’s ability to divest specific mineral property interests through simpler corporate ownership and to enable Terra to separately finance and develop its various mineral projects.”
In other words Terra’s hope is that through a new company investors will be able to see beyond the shine of its crown jewel, the 10% stake of the Midwest Northeast project, Hathor’s chief asset. At Midwest Northeast Hathor has drilled as much as 13 metres grading 18.12% U3O8.
Though the question of how shareholders will ultimately value Terra’s non-Hathor prospects, which are also primarily in the uranium sector, is as of yet unanswerable, initial signs suggest Terra’s bet on a positive outcome may be a savvy one. On news of the proposed split up of assets Terra’s shareprice had edged up 4¢ to 42¢.
Overall at the two properties where Terra holds or stands to hold its largest stakes, Lac Kachiwiss and REN, exploration is at an early stage. The Lac Kachiwiss project has a historic, non-National Instruments 43-101 compliant resource of 16.1 million tonnes grading 0.015% U3O8. Terra also recently completed a 4,000 metre drill program at Lac Kachiwiss in which it intersected as much as 117 metres grading 0.01% U3O8.
At REN, where Terra has an option to earn a 51% interest, historic drilling has hit as much as 6 metres grading 9.3 grams gold per tonne.
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