looking for some insight.....
posted on
Sep 16, 2013 09:23PM
Resource projects cover more than 1,713 km2 in three provinces at various stages, including the following: hematite magnetite iron formations, titaniferous magnetite & hematite, nickel/copper/PGM, chromite, Volcanogenic Massive and gold.
So I have some questions....
As of June 30, 2013, the Gimus had $180,525 in cash and $115,738 in taxes receivable.
Additionally as at August 27, 2013:
Common shares outstanding : 13,104,000
Broker options outstanding : 226,320
Directors options outstanding : 750,00
...so ~14million shares fully diluted..
Now if this transaction occurs, FNC will receive 43million shares and CHM 2million shares,
for a new total FD of 59million shares
That would give FNC 43/59 , or ~73% of the fully diluted shares .....
But I am assuming no monetary transaction will take place , is that correct?
If FNC in fact only receives shares , then why are we in
fact giving up 30% of the company to have it managed by another company , two directors
of which who should be advancing the project as part of their duties asssociated with being
directors/management of FNC?. What would we be getting in exchange for the loss of 30%,
aside from shares deemed to be $0.10 , but which currently only have a SP of $0.055?
Or, does Gimus need to come up with $4.5million so that it can provide FNC its 43 million shares at $0.10 and CHM its 2million shares at $0.10?
Now, Gimus currently only has enough funds to cover the minimal listing and G and A fees. How would they raise funds to either advance the property or provide CHM and FNC their shares? Say for example that they will require $5 miilion for either of these purposes. If they proceed to raise equity via a PP at their current SP of ~$0. 05, they would need to issue an additional 100million shares....that would dilute the holding of FNC to only ~27%.
This can't be right? What am I missing here?
Anyone, Please address my misunderstanding/faulty logic/financial iliteracy
Cheers, Luker
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GIR.V | 0.055 | 0.00 |
MONTREAL, QUÉBEC--(Marketwired - Sept. 16, 2013) - Fancamp Exploration Ltd. ("Fancamp")(TSX VENTURE:FNC), Champion Iron Mines Limited ("Champion") (CHM.TO) and Gimus Resources Inc. ("Gimus") (TSX VENTURE:GIR) are pleased to announce the signing as of today of an agreement between all parties to develop Fancamp's Lac Lamêlée South Iron Project (the "Project") in the Fermont Mining District of northeastern Quebec.
Under the proposed transaction, which is subject to the approval of the TSX Venture Exchange (the "TSX-V"), Fancamp will transfer its 100% interest in the Project in consideration for the issuance by Gimus of 43,000,000 common shares to Fancamp at a deemed price of $0.10 per share and the grant of a royalty corresponding to 1.5% of the net sales price of minerals extracted from the Project. Furthermore, Champion will waive the exercise of its right of first refusal with respect to the transfer of the Project in consideration for the issuance by Gimus of 2,000,000 common shares to Champion at a deemed price of $0.10 per share and the issuance by Fancamp of 4,000,000 common shares of its capital stock at a deemed price of $0.05 per share. The transaction will constitute a reverse takeover of Gimus by Fancamp within the meaning of the policies of the TSX-V and will be submitted to the approval of the Gimus shareholders.
Mr. Peter H. Smith, P. Eng., Chairman of Fancamp stated, "The proposed transaction is a win-win-win situation for Fancamp, Champion and Gimus. Champion has allowed Fancamp to sell the Lac Lamêlée South Iron Project to Gimus who will quickly embark on further drilling to define the highest quality mineral resources on the Project and plans to conduct a feasibility study in 2014, ultimately following the same path as other iron deposits in the Fermont-Wabush region. Fancamp, with its initial 70% stake in Gimus, will be in a position to take full advantage of the Project upside as the company's largest shareholder assuming the completion of the contemplated transaction."
Mr. Smith also declared "The Project is in proximity to excellent surface infrastructure located 10 km west/southwest of Champion's Consolidated Fire Lake North project with reserves of 464.6 million tonnes at more than 32% iron(www.championironmines.com) and 10 km to the northwest of Arcelor Mittal's Fire Lake Mine pegged at 341 million tonnes grading 33% iron (www.arcelormittal.com)."
Pierre Barnard, Chairman of the Board of Gimus further asserted, "The proposed transaction enables Gimus to acquire a significant project on favorable terms given the current economic conditions for junior mineral companies and the state of the iron ore industry. This transaction should greatly benefit the Gimus shareholders if the current economic recovery strengthens and the demand for iron ore improves. The location of the Project and access to existing infrastructures was of prime importance in the decision of the Gimus board of directors to go ahead with the transaction."
Tom Larsen, President and CEO of Champion added, "Champion is pleased to welcome another mining development company with sound technical expertise, engaged in advancing a promising iron deposit to potential feasibility stage. The Lac Lamêlée South Iron Project along with other advanced properties in the vicinity such as Champion's Consolidated Fire Lake North deposit will only enhance and support the concept of a new multi-user rail system with the first leg being built in the Quebec district of the Southern Labrador Trough. Higher quality iron ore would greatly improve the economics for the rail. The Lac Lamêlée South Iron Project appears to have this potential."
Highlights of the transaction:
The portion of the contemplated transaction between Gimus and Fancamp is an arm's length transaction within the meaning of the policies of the TSX-V. In addition, Jean Lafleur, President and Chief Executive Officer and director of Fancamp, is also a director of Gimus. Guy Girard, President and Chief Executive Officer and director of Gimus, is also the Executive Vice President and Project Logistics Manager of Fancamp. Accordingly, the votes attached to the securities of Gimus held by each of Jean Lafleur and Guy Girard will be excluded from Gimus shareholder's approval.
Based on the fact that Champion is an insider of Fancamp, the portion of the contemplated transaction between Champion and Fancamp involves non-arm's length parties and constitutes a "related party transaction" as defined under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The portion of the contemplated transaction between Champion and Fancamp is exempt from the valuation and minority shareholder approval requirements of MI 61-101 by virtue of the exemptions contained in Sections 5.5(a) and 5.7(1)(a) of MI 61-101 based on that neither the fair market value of the subject matter of, nor the fair market value of the consideration to be paid to Champion pursuant to the contemplated transaction exceeds 25 % of Fancamp's market capitalization.
Gimus will be seeking an exemption from the sponsorship requirements in accordance with TSX-V Policy 2.2.
The contemplated transaction is expected to close on or before December 31, 2013, subject to final regulatory approvals.
The Lac Lamêlée South Iron Project
The Project consists of 29 mineral claims covering 1,524 hectares or 15 km2 located in northeastern Quebec near the border with Newfoundland and Labrador, approximately 50 km south of the city of Fermont (Quebec). The Project is situated in the southern segment of the Labrador Trough which consist of early Proterozoic sedimentary and volcanic rocks highlighted by iron formations that have been mined since 1954. This segment of the Labrador Trough sits in the Gagnon Terrain of the Grenville Geological Province. All the economic iron concentrations in the Labrador Trough are located in the same litho-stratigraphical package termed the Sokoman Formation also known in Fermont as the Wabush Formation. The higher metamorphic grade common throughout the Gagnon Terrain is responsible for recrystallizing the iron oxides into coarse-grained magnetite and specular hematite thus improving the quality of the iron ore for processing.
P.J. Lafleur Géo-Conseil Inc., recently completed Mineral Resource Estimates ("MRE") for the Project (refer to the Fancamp news release dated May 2, 2013) which is available as a National Instrument ("NI") 43-101 Technical Report under the Fancamp filings on SEDAR at www.sedar.com. At a 22% Fe2O3 cut-off grade, there are 520 million tonnes grading 39.5% Fe2O3 (or 27.6% FeT) in the inferred mineral resources* category. The 22% Fe2O3 cut-off grade used is a natural cut-off grade since the drilling and the combined geological-resource modeling covered the target iron formation in its entirety. A Whittle Open-Pit Shells Study outlined two open pit shells. The first a smaller open-pit shell of 315 million tonnes at a grade of 41.2% Fe2O3 (28.8% FeT). The second a larger open-pit shell of 520 million tonnes at a grade of 39.5% Fe2O3 (27.6% FeT). Results demonstrate the amenability of the Inferred MRE to potential open pit mining with 100% of Inferred MRE reporting within a conceptual open-pit shell.
* Inferred mineral resources are that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from drill holes and outcrops. There has been insufficient exploration to define any of the resources as Indicated or measured mineral resources and there is no guarantee that further exploration will upgrade the inferred mineral resources to indicated or measured mineral resources.
Completion of the transaction is subject to a number of conditions, including TSX-V acceptance and court and shareholder approval. The transaction cannot close until all requisite approvals are obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of Gimus should be considered highly speculative.
The TSX-V has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.