An agreement in principle has been arranged among Toronto-listed Neomar Resources and American Barrick Resources Corp. and the Roy-L Group of companies, which is controlled by Joseph L. Rotman.
The arrangements are as follows:
* American Barrick will sell to Roy-L its 1,824,655 shares of Neomar and its advances to Neomar. This holding represents about 42% of the issued shares of Neomar.
* At the same time, Neomar will acquire from Roy-L certain oil and gas properties at a price to be established by an independent appraiser or appraisers. The properties have a value of about $13 million.
Each one dollar of the purchase price will be satisfied by the issue to Roy-L of three voting preference shares to be created of Neomar and one common share of Neomar. The preference shares will be convertible into common shares of Neomar on a one for one basis at 30 cents per share at any time before Jan 1, 1992.
* To provide funding for exploration and development and general corporate purposes, Neomar will agree to issue, any time before Dec 31, 1988, a minimum of $13 million and a maximum of $15 million of its common shares to Roy-L at a price of 35 cents per share, if the shares are flow-through shares. Otherwise the price would be 25 cents per share.
These transactions are subject to the execution of formal documentation, the approval of Neomar shareholders and the TSE. It’s expected that shareholder approval will be sought late this month or in early March.
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