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Mining industry

Prophecy Resource Corp. and Pacific Coast Nickel Corp. Complete Definitive Arrangement Agreement for Wellgreen PGM Ni-Cu and Lynn Lake Nickel Projects

Strategic Insights

— 2 min read

Prophecy Resource Corp. and Pacific Coast Nickel Corp. announced that they have signed a definitive arrangement agreement to sell Prophecy's Wellgreen PGM Ni-Cu and Lynn Lake Nickel projects to PCNC. The transaction will be implemented by way of a plan of arrangement under the Business Corporations Act (British Columbia), with PCNC acquiring 100% of the shares of Prophecy's subsidiary, Spinco, in exchange for the issuance of 450,000,000 common shares in the capital of PCNC. The effective date of the arrangement and the distribution of PCNC shares is expected to be in early May.

Key Takeaways:

  • Prophecy Resource Corp. and Pacific Coast Nickel Corp. have signed a definitive arrangement agreement to sell Prophecy's Wellgreen PGM Ni-Cu and Lynn Lake Nickel projects to PCNC.
  • The transaction will be implemented by way of a plan of arrangement under the Business Corporations Act (British Columbia), with PCNC acquiring 100% of the shares of Prophecy's subsidiary, Spinco, in exchange for the issuance of 450,000,000 common shares in the capital of PCNC.
  • Prior to the arrangement, Prophecy will transfer the assets comprising the projects, as well as $2 million cash, to Spinco.
  • Upon completion of the arrangement, Prophecy and its shareholders will hold approximately 88.97% of the issued and outstanding shares of PCNC.
  • Prophecy may also grant up to 500,000 options prior to the effective time of the arrangement.
  • The arrangement is subject to a number of conditions, including regulatory approval, shareholder approvals, and approval of the British Columbia Supreme Court.
  • Trading in the securities of exploration and development stage resource companies, such as PCNC, involves significant risks and uncertainties, including market volatility and geopolitical events.
  • Upon completion of the arrangement, PCNC will consolidate its share capital on a 10:1 basis and change its name to "Prophecy Platinum Corp."

Statistics:

  • 189,669,994 Prophecy shares are issued and outstanding as of the date of this press release.
  • 47,650,658 Prophecy options and warrants are issued and outstanding as of the date of this press release.
  • Each Prophecy shareholder would be entitled to 0.9482 of a pre-consolidation PCNC share as a result of the arrangement.
  • Assuming the outstanding shares and options remain unchanged on the effective date, Prophecy shareholders will hold approximately 88.97% of the issued and outstanding shares of PCNC.
  • PCNC will issue 450,000,000 common shares in the capital of PCNC in exchange for 100% of the shares of Spinco.

Sources:

  • Prophecy Resource Corp. and Pacific Coast Nickel Corp. (press release, April 4, 2011)
  • Prophecy Resource Corp. (press release, January 18, 2011)
  • Prophecy Resource Corp. (press release, February 17, 2011)
  • Marketwire (press release, April 4, 2011)

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