Summary
- Platina Resources has been advised by Major Precious Metals regarding the Canadian Securities Exchange approval to complete the acquisition of the Skaergaard Project in escrow pending its final approval.
- Major has issued the consideration shares and deposited the cash payment to be made to PGM in a segregated account that would be released post the final approval.
- Once the acquisition gets completed, PGM will become a major shareholder in Major and get a right to a seat in the Major's board.
- Platina Managing Director Corey Nolan highlighted that the funds would be used to advance the exploration plans in Western Australia.
Australia-based company Platina Resources Limited’s (ASX:PGM) sale of Skaergaard Project in Greenland to Canadian-listed Major Precious Metals Corp (CSE: SIZE) has inched closer to completion.
Major Precious Metals has informed Platina Resources to have received a nod from the Canadian Securities Exchange (CSE) to close the project acquisition in escrow pending its final approval.
Must read: Platina Resources' Skaergaard Sale Process Nearing Completion, Shares Climb ~6%
Escrow Closing Conditions
In line with the escrow closing conditions, Major has issued the consideration shares and deposited the cash payment to be made to PGM in a segregated account. Major is expecting the CSE's final approval shortly, and until then the consideration shares and the cash payment will be held in escrow and not released to PGM.
Once released from escrow, PGM will receive AUD 0.52 million in cash and 55 million Major shares, which represent AUD 14.6 million in value for PGM shareholders based on the last traded price of CUD 0.25 cents per share.
Moreover, the Skaergaard exploration licences will be transferred to Major.
PGM's shareholding in Major will be subject to a 24-month time-release pooling arrangement. In this period, they may not be traded, assigned, pledged or transferred. The shares will be released in four equal tranches with the first release after six months and each following release every six months after that.
Subject to an obligatory four-month escrow period which has begun now, there are provisions for accelerated share releases related to changes in corporate structure or share distribution to the shareholders of PGM or share price performance.
Sale Completion – A Win-Win Outcome
The deal completion will improve Major's palladium and gold exploration and development portfolio. After the acquisition completes, Platina Resources will become a crucial shareholder in Major, besides having a right to a seat on Major's board.
Mr Corey Nolan, Managing Director at Platina Resources, stated that the transaction completion would be a win-win outcome. The new funds through the transaction will be used to advance PGM's exploration plans in Western Australia. The company is currently reviewing several merger and acquisition opportunities to significantly expand its presence in gold.
Stock performance: On 29 October 2020, PGM closed the day's trade at AUD 0.044, up by 2.325 per cent with a market capitalisation of AUD 17.37 million.
