Erdene Resource Development Corp. (TSX: T.ERD, Stock Forum) said that it is proposing a plan of arrangement to separate its Mongolian metals exploration projects, which will stay within Erdene, from its North American projects, consisting primarily of its 25% interest in the Donkin Coal Project, which will become the major asset of Morien Resources Corp.
According to the Erdene press release, upon completion of the arrangement, Erdene shareholders will control 100% of the Mongolia assets through Erdene and 97.25% of Morien Resources.
At the Meeting, shareholders will be asked to approve the arrangement, which involves the transfer by Erdene to Advanced Primary Minerals Corp. (TSX: V.APD, Stock Forum) of $1.95 million cash and all of Erdene's North American property interests, comprised primarily of its 25% interest in the Donkin Coal Project in Cape Breton, Nova Scotia, by way of the transfer of the shares of Erdene Resources Inc., a wholly owned subsidiary of Erdene, to Advanced Primary Metals.
As part of the arrangement, following the transfer, Erdene Resources and Advanced Primary Metals will form an amalgamated corporation to be named "Morien Resources Corp."
The arrangement will allow Erdene to focus on advancing its metals projects in Mongolia, led by the significant new gold discovery at Altan Nar, and will allow Morien to focus on the development of bulk commodity projects in North America, primarily coal projects, led by the Donkin Coal Project.
Erdene is a diversified resource company with metal and coal interests in Mongolia, as well as the Donkin Coal Project and industrial mineral assets in North America.
On Tuesday, Erdene’s stock was down 1.5% and was trading at $0.315 a share. The company has a market cap of $30.2 million, based on 95.8 million shares outstanding. The 52-week high and low was $0.65 and $0.155 respectively.