Earlier this month, Golden Share Mining (GSH.V) sold its Lac Fortune West property to Vantex Resources (VAX.V). Lac Fortune West consists of a land position of approximately 3.7km², and was a non-core asset for Golden Share Mining.
We consider the sale to be a good thing, as Golden Share wasn’t working on the property and the acquisition price is very reasonable. In addition to a 1% royalty, Vantex agreed to pay C$100,000 in cash and issue 1M shares to Golden Share (with a value of C$120,000 at their current share price).
We believe this is a good deal, as the company’s treasury increases by C$220,000 without diluting the current shareholders. If Golden Share had to raise money at C$0.05, they’d have to issue 4.4M shares to raise the same amount. As Lac Fortune West isn’t a core property, we consider the sale to be a smart move to increase the company’s cash position.
Philippe Giaro, CEO of Golden Share, comments ‘The value of the transaction at the current share price of Vantex Resources is approximately C$220,000, compared to a book value of Lac Fortune West of C$5,047, so we think this deal offers excellent immediate leverage for our shareholders while retaining a long term interest in the property with a 1%NSR’.
Disclosure: The author holds a long position in Golden Share Mining Corp. Please see our disclaimer for current positions.