Excellon Resources proposes Saxony Silver spin‑out with 48% for holders
Excellon would retain 19.9 per cent of the German explorer while shareholders keep their proportionate interest in its Peru-focused business.
Mara Quinlan
Excellon Resources Inc. CVEEXN OTCMKTSEXNRF FRAE4X2 announced on Wednesday a proposed spin-out of approximately 44.1 million shares in Saxony Silver Corp. Existing holders would directly own about 48 per cent of the German silver explorer while retaining their proportionate ownership of Excellon.
Excellon shares CVEEXN closed at C$0.25 at 4:00 p.m. EST on Nov. 10 on the TSX Venture Exchange, before the announcement.
Saxony Silver, a privately held, majority-owned subsidiary, owns the 34,000-hectare Silver City silver-zinc-lead exploration project in Germany's Freiberg district. Excellon's Nov. 11 release says the subsidiary would start with approximately C$1.8 million in cash for listing costs, administration and initial target generation.
Excellon would retain a 19.9 per cent stake in Saxony Silver while directing its capital and management toward the Mallay Mine restart and Tres Cerros exploration property in Peru. Completion requires at least two-thirds of shareholder votes cast, court approval and exchange approval.
"Excellon Shareholders will own the Silver City Project directly through a dedicated, funded and standalone company and Excellon can focus on its properties in Peru," chief executive Shawn Howarth said in the release.
The first work would rank targets across Silver City's four exploration licences, using the existing drill database and geophysics.
Excellon said drilling completed from 2020 to 2022 totalled more than 13,200 metres. Mineralized vein structures were intersected in 37 holes.
The Bräunsdorf vein system has been traced over 13 kilometres of strike.
The agreement was signed on Nov. 10 and provides for a statutory plan of arrangement under Ontario's Business Corporations Act. The approximately 44.1 million shares earmarked for distribution are stated on a post-split basis.
Shareholders would receive Saxony Silver shares pro rata to their Excellon holdings at the record date. Under the announced terms, that date would be the close of business on the business day before completion, unless Excellon's board selects another date.
The required court approval is from the Ontario Superior Court of Justice (Commercial List), while the exchange approval is from the TSX Venture Exchange. Excellon's board unanimously approved the arrangement and recommends that shareholders vote in favour.
Silver was quoted at US$52.94 per ounce on BullionVault's wholesale spot chart at 6:36 a.m. EST on Nov. 11.
Benton Resources Inc. CVEBEX announced on Nov. 9 a proposed Great Burnt copper-gold spinout whose terms would distribute about 40 per cent of the new company to its shareholders.
Read more: Benton Resources signs Great Burnt spinout agreement with C$10M financing
Excellon expects to hold the shareholder meeting on or about Dec. 16, according to its Nov. 11 release.
