A deal has been cut to keep the proposed Idaho-Maryland Mine reopening on track and its parent company, Emgold Mining Corp., fiscally solvent.
Emgold and Idaho-Maryland Mine Corp. President David Watkinson this morning said Emgold stock will be consolidated at a ten-to-one rate in an attempt to increase the value of the offering, which closed at 8 cents Wednesday.
The deal involving several large Emgold stockholders will see them sell their stock to an investment firm, which will then loan the money to Emgold to keep the Idaho-Maryland reopening process going.
“It's a good deal for us because it gives us the cash to get through the environmental process and to get our conditional mine permit,” Watkinson said.
The consolidation will also make the stock more attractive because investors are drawn to firms with fewer shares on the market than those with multiple shares out like Emgold, Watkinson said.
“We got fairly diluted raising money on low price stocks over the years,” Watkinson said.
The consolidation is subject to stockholders approval at a Sept. 10 Emgold meeting, according to a company statement.
The mine reopening is at least three years away with the environmental, permit and dewatering processes still to go, Watkinson said.