I believe that a spinoff would work as follows:
They would take over a shell company on the TSX in order to take over the symbol. This would save a lot of time.
They would then authorize 120 M shares to be issued in that new company. The shares would likely have a value of 1 cents or something insignificant (thought that is still 1.2 million dollars. Chump change considering they are at a market cap of 500M.
Noront would sell off the Double Eagle project to that company in exchange for shares. Each NOT shareholder on record as of a certain date would receive one share of the new company. This would cause the NOT SP to drop, but the new company SP to rise to the value of Double Eagle. NOT shareholders would now own shares in both companies.
This would have many benefits. One, it keeps the NOT shareprice from rising too high on multiple properties, avoid future stock splits while attracting new investors at reasonable SPs.
Two, it allows shareholders to sell of one of the shares (at a lower tax implication) than had the stock been worth the combined total of the two alone.
Three, it ensures that the warrants get taken out soon.
And most importantly, if a takeover bid is launched on either company, we still have shares in the other while cashing out big time on the takeover.
It is no wonder they hired that Financial guy to the team. I bet he is working on this as we speak.
The cool thing is that they could do this with many of the other properties, and we could end up owning shares in each property rather than NOT as a whole. If one of the properties needed cash for a mine, a PP could be issued for that one property without diluting shares in the other.
If NOT has not thought of this, then it might be worth mentioning this to them. I would love to have shares in properties represented by unique companies than one large company called NOT.
I guess this is what happens when you hit it big too fast. The threat of a takeover could wipe out Richard's efforts he has put in since 1993. I am sure he wants to avoid this.
I am so looking forward to the next week or so!!!
M1.
