Related companies Miramar Mining (TSE) and Northern Orion Explorations (VSE) plan to reorganize their Argentine holdings.
Northern Orion will acquire the issued capital in Grupo Minera Aconcagua S.A. (GMASA) from Miramar and several arm’s-length shareholders. GMASA, a private company, holds joint-venture and direct interests in 25 properties, plus various royalty interests in an additional eight concessions — all in Argentina.
Shareholders of GMASA will receive 6 million common shares of Northern Orion, $1.1 million cash and 10% of future equity financings capped at US$710,000. Of the 6 million shares, Miramar will receive 2.6 million plus $650,000 of the cash payment.
Miramar is not considered “arm’s-length” since all the directors of Northern Orion are also directors of Miramar. As a result, the agreement is subject to the approval of a majority of the minority shareholders, as well as regulators.
Subject to the completion of the agreement, Miramar will buy 4 million shares of Northern Orion through a private placement at 50 cents each. The placement includes warrants to buy an additional 2 million shares for two years. Proceeds will be used to pay the purchase price and fund exploration. Prior to the exercise of the warrants, Miramar will own about half of Northern Orion’s issued capital.
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