Nordgold pays first $500,000 tranche to purchase stake in Canada's Northquest
MOSCOW. June 16 (Interfax) - Gold mining company Nordgold has paid its first tranche of C$500,000, or around $459,000, to acquire stake in Canadian geological exploration company Northquest, the Canadian company said in a statement.
As a result, Nordgold received 2.78 million shares as part of an additional offering and 1.39 million common share purchase warrants. Each warrant gives Nordgold the right to buy one share of Northquest for C$0.24. The closing price of Northquest shares on the Toronto Stock Exchange on Friday, June 13, was C$0.175. In the future, Nordgold could spend C$333,000, or $306,000 at the current exchange rate, on first-tranche warrants.
"Pursuant to the second tranche of the offering, Northquest has agreed to issue 10,000,000 units of Northquest to Nordgold or its nominee at a price of $0.20 per Second Tranche Unit," Northquest has said. This is for C$2 million ($1.8 million), and warrants in the second tranche could be sold at C$0.27. Nordgold could therefore spend C$1.35 million, or $1.24 million.
Nordgold will spend a total of C$2.5 million ($2.3 million) on Northquest warrants and shares, and the company will initially receive 22.3% of charter capital. If Nordgold then uses all warrants on Northquest shares, its stake in the Canadian company could grow to 30%, but this will depend on dilution as a result of subsequent issues. Overall expenses will total around C$4 million, or $3.8 million.
