Precious Metal Resources Limited (ASX: PMR) (PMR) and Sovereign Gold Company Limited (ASX: SOC) (Sovereign Gold) have reached agreement on a proposed corporate restructuring to rationalise and simplify the structure and assets of each company (Corporate Restructure).
Background for the Proposed Corporate Restructure PMR and Sovereign Gold currently hold exploration tenements in the New England district of New South Wales targeting gold, precious and base metals.
Both PMR and Sovereign Gold have separately entered into Joint venture agreements and memoranda of understanding with Jiangsu Geology and Engineering Co. Ltd. (Sugec) of Nanjing, China.
PMR currently has a $2 million joint venture agreement and $8 million memoranda of understanding with Sugec. It is proposed to transfer this interest to Sovereign Gold. Proposed Corporate Restructure The following steps are proposed in order to rationalise the structure and facilitate effective management time and focus on the various exploration project areas held by PMR and Sovereign Gold:
1. Sovereign Gold to acquire EL4474, EL5339 and EL7679 (PMR Sugec Tenements);
2. Sovereign to relinquish control of PMR;
3. PMR would conduct a selective reduction of capital, whereby 64,000,000 shares in PMR, held by Sovereign Gold would be cancelled;
4. Sovereign Gold would then acquire the PMR Sugec Tenements for consideration of 1 million Sovereign Gold Shares (in satisfaction of LR 10.7).
