Goldstorm Metals Corp [GSTM-TSXV] investor Eric Sprott has acquired 8.77 million shares of the newly-listed company. Disclosure of the mining financier’s Goldstorm holdings follows the completion of a spinout transaction involving the company and Tudor Gold Corp. [TUD-TSXV, TUC-Frankfurt]
Goldstorm is a spin out company that was set up to hold Tudor Gold’s 100% interest in six contiguous mineral properties located in British Columbia’s Golden Triangle region, to the south of Tudor Gold’s flagship Treaty Creek project.
These assets are collectively known as the Crown property.
Goldstorm shares, which began trading on November 10, 2022, were priced at 26 cents on Thursday.
Under the terms of the spinout arrangement, Tudor Gold shareholders on record as of November 10, 2022, were set to receive approximately 0.251 of a Goldstorm share for each of their Tudor Gold common shares.
The holder of each share purchase warrant of Tudor Gold is entitled upon exercise thereof the receive 0.251 Goldstorm shares. Sprott currently owns 34.9 million common shares of Tudor Gold and 1.42 million Tudor warrants.
Prior to the arrangement, Sprott did not own any securities of Goldstorm Metals. However, as a result of the arrangement, he now owns 8.77 million Goldstorm shares and the right to receive 357,675 shares by exercising 1.42 million warrants, representing 13.7% of the outstanding Goldstorm shares on a non-diluted basis and approximately 14.2% on a partially diluted basis, assuming he exercises the Tudor warrants.
The purpose of this arrangement is to reorganize Tudor into two separate publicly traded companies, allowing Tudor to focus on its Treaty Creek project.
Goldstorm will focus on the Crown property, which consists of six contiguous mineral properties known as Mackie East, Mackie West, Fairweather, High North, Delta and Orion, plus the mineral property known as Electrum.
Tudor Gold holds a 60% stake in the Treaty Creek joint venture and is the project operator. The other partners are American Creek Resources Ltd. [AMK-TSXV] and Teuton Resources Corp. [TUO-TSXV, TUC-Frankfurt], each of which hold a 20% stake in the project. American Creek and Teuton are both fully carried to a production notice. At that point, each of the two is required to contribute their respective 20% share of development costs.
Until that happens, Tudor is required to fund all exploration and development costs. The property is also subject to 3% net smelter return royalties.
KSM is one of the world’s largest undeveloped gold projects as measured by reserves. It is estimated to contain 38.8 million ounces of gold and 10.2 billion pounds of copper in proven and probable reserves.