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Mining industry

First Mississippi Corp. Announces Spin-Off of FirstMiss Gold Inc.

Strategic Insights

— 2 min read

First Mississippi Corp.'s board of directors has approved the spin-off of its 81% owned subsidiary, FirstMiss Gold Inc. The move will provide FirstMiss Gold with more efficient access to capital for its exploration and development opportunities, while First Mississippi Corp. focuses on its core businesses. Shareholders will receive approximately seven-tenths of a share of FirstMiss Gold stock for each share of First Mississippi stock owned, along with cash in lieu of fractional shares. FirstMiss Gold has developed significant reserves and resources, including a geologic in-place resource of 6.2 million tons at 0.354 ounces of gold per ton, containing 2.2 million ounces of gold. The company has also identified a further geologic resource of 2.8 million ounces at the Turquoise Ridge deposit in north central Nevada.

Key Takeaways:

  • FirstMiss Gold Inc. has been approved for spin-off by First Mississippi Corp.'s board of directors, with the announcement made on September 25, 1995.
  • Shareholders will receive approximately seven-tenths of a share of FirstMiss Gold stock for each share of First Mississippi stock owned, along with cash in lieu of fractional shares.
  • FirstMiss Gold has significant reserves and resources, including a geologic in-place resource of 6.2 million tons at 0.354 ounces of gold per ton, containing 2.2 million ounces of gold.
  • The company has also identified a further geologic resource of 2.8 million ounces at the Turquoise Ridge deposit in north central Nevada.
  • FirstMiss Gold has developed mining plans that indicate 400,000 ounces of inferred resource may be extracted from the study area in addition to the probable reserve.
  • The company has an agreement with The Toronto-Dominion Bank to provide interim financing for ongoing development and working capital needs up to the amount of $20 million.
  • FirstMiss Gold has agreed to undergo a public offering of at least $50 million of common stock prior to April 28, 1996, with at least $15 million of the net proceeds to be used to pay down debt.
  • The debt owed by FirstMiss Gold to First Mississippi will be due no later than September 22, 2000, and will bear an interest rate no greater than LIBOR plus 1 percent.

Statistics:

  • 6.2 million tons: geologic in-place resource at 0.354 ounces of gold per ton, containing 2.2 million ounces of gold.
  • 2.8 million ounces: further geologic resource at the Turquoise Ridge deposit in north central Nevada.
  • 400,000 ounces: inferred resource that may be extracted from the study area in addition to the probable reserve.
  • 2.7 million ounces: FirstMiss Gold's proven and probable reserves, an 87 percent increase from fiscal year-end reserves.
  • 81%: FirstMiss Gold's ownership by First Mississippi Corp.
  • 14,750,000 shares: FirstMiss Gold's shares owned by First Mississippi Corp.
  • $85 million: estimated capital required to bring the initial phase of the Turquoise Ridge underground mine into commercial production of 2,000 tons per day.
  • $270 per ounce: cash cost of Turquoise Ridge production, expected to be approximately based on estimates contained in the MRDI report.

Sources:

  • "First Mississippi Corp. Announces Spin-Off of FirstMiss Gold Inc.," Business Wire, September 25, 1995.
  • "First Mississippi Announces Restructuring Plan," Business Wire, April 28, 1995.
  • Mineral Resources Development, Inc. (MRDI), Pre-Feasibility Study, Turquoise Ridge Deposit, Getchell Property, Nevada.

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