Chalice/Coventry
Overview
Under a BC Plan of Arrangement, Coventry is to transfer most of its subsidiaries (the "Targets") to Western Rift (a subsidiary of Chalice) in consideration for Chalice shares, which Coventry will then transfer to its shareholders as a stated capital distribution. The Arrangement is expected to result in the Coventry shareholders holding 15.46% of the Chalice shares, and in Coventry holding only cash and a project in Alaska.
Coventry
Coventry is a BC mineral exploration company which is listed on the TSXV and the ASX, with 91M shares outstanding. The Targets hold a gold project and other mineral rights in Ontario. It also has mineral rights in Ontario (also held through Targets).
Chalice
Chalice is an Australian mineral exploration company listed on the ASX and TSX, with 252M shares outstanding. Western Rift is its Australian wholly-owned subsidiary. Chalice sold a gold project in Eritrea in September 2012 for A$54M.
Plan of Arrangement
- All Target share will be transferred by Coventry to Western Rift in consideration for 46M shares of Chalice.
- Coventry will deliver such Chalice shares to its shareholders as a distribution of stated capital.
Canadian tax consequences
The fair market value of the Chalice shares distributed by Coventry is not expected to exceed the paid-up capital of the Coventry shares, so that no deemed dividend is expected.
Overview
Under a BC Plan of Arrangement, Coventry is to transfer most of its subsidiaries (the "Targets") to Western Rift (a subsidiary of Chalice) in consideration for Chalice shares, which Coventry will then transfer to its shareholders as a stated capital distribution. The Arrangement is expected to result in the Coventry shareholders holding 15.46% of the Chalice shares, and in Coventry holding only cash and a project in Alaska.
See detailed summary under Cross-Border Acquisitions – Inbound – Asset sale/share distribution.