Benton Resources signs Great Burnt spinout agreement with C$10M financing
Eligible holders would receive about 40% of Anchor Metals, while a warrant pool could leave Benton without an equity stake.
Mara Quinlan
Benton Resources Inc. CVEBEX reported on Monday a definitive agreement to spin out its Great Burnt copper-gold project alongside C$10 million to C$10.7 million in financing. Eligible shareholders would receive an estimated 40 million shares in Anchor Metals Corp., representing about 40 per cent of its anticipated equity.
Benton shares were unchanged at C$0.07 on the TSX Venture Exchange at 4:00 p.m. EST on Nov. 6, according to CVEBEX. That close preceded Monday's announcement.
The Nov. 4 agreement with privately held Silverback Metals Corp. targets completion in the first quarter of 2027. Closing requires shareholder approvals, Supreme Court of British Columbia orders, TSXV approvals and completion of the financings.
Benton would initially receive 50 million Anchor shares for its project interests. About 10 million would enter a pool for Benton warrant holders, leaving Benton with no Anchor equity if all designated warrants are exercised.
Silverback is to complete the financing, with proceeds held in escrow pending completion of the arrangement, Benton said in its Nov. 9 release. The anticipated capitalization totals 100 million Anchor shares before Benton's distribution, with financing investors owning approximately one-third.
Existing Silverback shareholders would hold about 16.67 million shares, or 16.67 per cent. Benton would own half before distributing shares to its shareholders and placing the balance in the warrant pool.
Shareholders would receive approximately one Anchor share for every 7.5 Benton shares, with the final ratio fixed at completion. Accounts entitled to fewer than 500 Anchor shares would be excluded, meaning accounts holding fewer than 3,750 Benton shares would not participate.
"The distribution is structured to be completed as an income tax-deferred return of capital for Canadian shareholders of Benton," the company said in its Nov. 9 release.
Under the Nov. 4 agreement, unclaimed shares would return to Benton as unexercised warrants expire. If all designated warrants are exercised, Benton says it would receive approximately C$8.3 million in exercise proceeds.
Benton would retain a 1 per cent net smelter return royalty on applicable properties without existing royalties. Under the Nov. 4 agreement, Anchor could buy back half that royalty for C$1 million.
Benton has earned approximately 76 per cent of the joint-venture portion of Great Burnt, whose partner has acknowledged it will not participate further. Anchor would assume Benton's rights to earn full ownership through further programs that dilute that partner.
Elsewhere in Newfoundland and Labrador, FireFly Metals Ltd ASXFFM TSEFFM said in its Nov. 9 release that Green Bay's resource update and definitive feasibility study remain on track for the March quarter of 2027.
Read more: FireFly Metals extends Green Bay core with 16.4 metres at 9.2 per cent CuEq
Silverback is to use commercially reasonable efforts to complete the financing and obtain conditional TSXV listing approval by Jan. 15, 2027, ahead of the arrangement's March 31 outside date.
