From the ADY website.......
Questions & Answers on the Admiralty Resources Demerger
Q: What is the process for the Admiralty Resources demerger and how will my share holding be affected?
Step 1: Consolidation of Admiralty Resources (ADY) shares
Admiralty Resources shares will be consolidated on the basis of 1 new ADY share for every 3.47215 existing shares held.
As an example; at the time of the demerger a shareholder has 100,000 ADY shares trading at 40 cents. After consolidation their holding would equate to approximately 28,800 shares trading at $1.39.
Step 2: Issue of Rincon Lithium shares
All shareholders will then be issued 1 Rincon Lithium share for every consolidated ADY share they hold.
This will occur after the experts report, director's report, prospectus for the demerger, cost base for Admiralty Resources and Rincon Lithium shares are calculated and an EGM (Extraordinary General Meeting) is held.
Q: When will the demerger take place?
At this stage the demerger is scheduled for February 2008 however there are many issues which could affect this date.
Q: How will the demerger affect share price?
It is likely that the ADY share price will drop after the demerger reflecting the value of the Rincon business being extracted.
The Rincon Lithium share price will assume a premium to the value currently held in Admiralty. This is because pure chemical companies trade at a 25-50% earnings premium to iron ore companies.
The affect of the demerger is to give shareholders a free increase in price by virtue of the different P/E's.
Q: How will the value and subsequent cost base of the new ADY shares and Rincon Lithium shares be calculated?
We will get an expert to calculate the value and subsequent cost base of the Santa Barbara business as well as that of the Rincon Lithium business.
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INFINITY LITHIUM CORPORATION LIMITED
Ryan Parkin, Managing Director & CEO
Ryan Parkin
Managing Director & CEO
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