Riverside Resources (RRI.V) is going ahead with its plan of arrangement to spin out the shares of Capitan Mining to its own shareholder base after securing shareholder approval to go ahead. As per the proposed plan of arrangement, the old shares of Riverside Resources will be ‘split’ into one new share of Riverside as well as 0.2767 shares of Capitan Mining, the newly created company that will hold Riverside’s Penoles gold-silver asset.
Capitan Mining is currently also trying to raise some cash (which won’t be very easy given the current market circumstances although the precious metals sector has had a few good days lately) to ensure it has enough working capital to continue to work on the Penoles project which already hosts 330,000 ounces of gold and approximately 17 million ounces of silver (the El Capitan and Jesus Maria resource combined). This resource was only based on 11,000 meters of drilling in 86 holes and remains open in several directions.
We will report back once there are more details on the spinout of Capitan Mining (dates and the initial cash position when Capitan Mining comes out of the gates).
Disclosure: The author has a long position in Riverside Resources. Riverside is a sponsor of the website.