Trans Hex shareholders okay restructuring

Shareholders have voted in favour of a plan put forward by management of Trans Hex International (THI-T) designed to settle the company’s debt with African parent Trans Hex Group (THG).

THI will transfer to THG all of its assets, save for a 75% stake in the Ngami property, which has an estimated fair market value in the range of $477,000-574,000.

Headed to THG are a 65.5% interest in the Barra Grande project in Brazil, the half-owned Northbank project in Namibia, the 90%-owned Skeleton Coast project in Namibia, and the 15%-owned Limpopo project in Zimbabwe. Of these, Barra Grande and Northbank are the most advanced, though work at the latter has been stalled since 1998, owing to an ongoing legal dispute with a local landowner. (At Barra Grande, 2,400 cubic metres of trenched intermediate gravels from the Queixada area have yielded only 12 diamonds, less than half the number recovered from the Villa Barroso area.)

In return, THG will settle THI’s $952,014 debt and assume $5.1 million in project finance loans which it, THG, made to some THI subsidiaries. Also included are $7.3 million in loans owing to Trans Hex Bermuda.

THI will retain a 1% interest in all dividends received by Trans Hex Namibia from Northbank Diamonds and Hoanib Diamonds and a half-interest in all future dividends received from Trans Hex Zimbabwe from the Limpopo property in Zimbabwe. THI will continue to act as operator at Ngami.

Also, THI will buy and cancel, for no consideration, the 10.7 million shares (or 73.2%) of THI held by THG. The move will reduce the number of THI outstanding to 3.9 million. In the end, about 21.6% of those will be held by Madaket Resources International, which will become THI’s largest shareholder. Madaket is owned by James Bruchs, who also owns another 235,000 THI shares, giving him an overall 27.6% stake in the Toronto-based junior.

Shareholders also voted in favour of changing the company name to Tsodilo Resources.

Joining THI’s board of directors are James Bruchs, Christopher Jennings and Andrew Moore.

The plan, which has yet to be approved by regulators, would also see the old stock option plan replaced under Canadian Venture Exchange rules.

THG spun-off THI in 1995 to function as its international exploration arm.