Kootenay Restructures its Assets to Focus on Mexico OperationsBy Antonio Trujillo | Thu, 08/26/2021 - 09:36
Canada-based Kootenay Silver is redirecting its portfolio efforts to Mexico, stating they’re getting rid of possessions in Canada.
Kootenay Silver has announced they are spinning-out up to 80 percent of their exploration assets in British Columbia to its shareholders by way of a capital reorganization, aiming to focus their efforts and portfolio in Mexico. Kootenay will distribute Spinco’s (a wholly-owned subsidiary) shares amongst its shareholders, and in turn, shareholders will trade each existing share with a new Kootenay share and a 0.04 percent stake in Spinco. Upon termination, the deal will effectively make shareholders have a two-way participation with Spinco, focused in Canada, and Kootenay, will continue to expand its interests in Mexico. The deal will be presented to shareholders on September 15, where a two-thirds majority vote will be required for passage.
“We believe the spin-out of the Canadian Assets will be very beneficial to shareholders. Among other benefits, it will unlock the value of the Canadian Assets by allowing it to be developed separately, by a skilled and experienced management team, and it will allow our shareholders to own shares in two companies," said James McDonald, Kootenay’s President and CEO. In addition, both McDonald and Kootenay´s CFO Raj Kang will hold their respective positions.
The arrangement was made in pursuance of the recent Business Corporations Act passed by the province of British Columbia. Moreover, the company stated that this was also an effort to better manage their Mexican and Canadian assets, having specialized teams working in each.
During MBN´s Mexico Mining Forum 2021 earlier this year, Kang said “people need to know what resources they have and how they can best use them...We want to make sure that we have an effective risk-reward system in place for the utilization of our fund.”
Regarding Kootenay’s operations in Mexico, their portfolio consists of four different projects and a silver resource base with properties in La Cigarra and La Negra. The company holds one of the largest junior portfolios for silver assets in the country.
Furthermore, MBN has previously reported on Kootenay’s promising findings in Sonora, at the Cervantes porphyry gold-copper property, and the company’s historic rehabilitation efforts at the Columba Silver Project in Chihuahua.