Rayrock Resources Inc. Announces Proposed Statutory Plan of Arrangement with Glamis Gold Ltd.

Strategic Insights -

Rayrock Resources Inc. has announced a proposed statutory plan of arrangement between itself and Glamis Gold Ltd., which, if approved, would result in Rayrock becoming a wholly-owned subsidiary of Glamis. The arrangement offers Rayrock shareholders the option to receive either 2.4 common shares of Glamis or 1.6 common shares of Glamis and Cdn$3.00 cash for each share of Rayrock. The principal purpose of the meeting is to consider approving this proposal, which has been unanimously recommended by the Board of Directors of Rayrock. Notably, BlackRock Ventures Inc., a significant shareholder of Rayrock, has agreed to vote in favor of the proposed arrangement.

Key Takeaways:

  • The proposed statutory plan of arrangement between Rayrock Resources Inc. and Glamis Gold Ltd. aims to make Rayrock a wholly-owned subsidiary of Glamis.
  • Rayrock shareholders will have the option to receive either 2.4 common shares of Glamis or 1.6 common shares of Glamis and Cdn$3.00 cash for each share of Rayrock.
  • BlackRock Ventures Inc., which owns 100% of the multiple voting shares and 18.6% of the subordinate voting shares of Rayrock, will receive 3,285,800 shares of Magin Energy Inc. as partial consideration for the exchange of its Rayrock shares, contingent upon regulatory and shareholder approvals.
  • The exchange ratio of Magin shares for Glamis shares was based on the average closing prices of such shares for the 90 trading days prior to January 23, 1999.
  • The holders of a significant number of Rayrock shares, including BlackRock, have agreed to vote in favor of the proposed arrangement.
  • The Board of Directors of Rayrock has unanimously recommended that shareholders vote to approve the arrangement in order to secure a preferred exchange option.
  • BlackRock Ventures Inc., which owns a significant portion of Rayrock's shares, will receive Magin Energy Inc. shares as part of the arrangement, contingent upon certain conditions.
  • Rayrock produces gold from three mines in Nevada and copper from the Ivan Mine located in the Atacama Region of Chile.
  • Glamis Gold Ltd. is a low-cost, growth-oriented gold mining company engaged in the open pit mining and extraction of precious metals by the heap leach process.

Statistics:

  • 18.6%: The percentage of subordinate voting shares of Rayrock owned by BlackRock Ventures Inc.
  • 100%: The percentage of multiple voting shares of Rayrock owned by BlackRock Ventures Inc.
  • 3,285,800: The number of shares of Magin Energy Inc. that BlackRock Ventures Inc. will receive as partial consideration for the exchange of its Rayrock shares.
  • 90: The number of trading days used to determine the average closing prices of Magin shares and Glamis shares prior to January 23, 1999.
  • Cdn$3.00: The amount of cash that Rayrock shareholders may receive as part of the proposed arrangement.
  • 2.4: The number of common shares of Glamis that Rayrock shareholders may receive for each share of Rayrock.
  • 1.6: The number of common shares of Glamis and Cdn$3.00 cash that Rayrock shareholders may receive for each share of Rayrock.

Sources:

  • Business Wire, "Rayrock Resources Inc. Announces Proposed Statutory Plan of Arrangement with Glamis Gold Ltd."

February 1, 1999