Coeur d’Alene uses cashless exercise warrants in acquisition of Orko Silver

A B.C. subsidiary of Coeur d’Alene is acquiring Orko Silver under a plan of arrangement for consideration including warrants to acquire Coeur d’Alene shares.  As the issuance of shares on exercise of the warrants would not be exempt from registration requirements under the 1933 U.S. Securities Act, the warrants have a cashless exercise feature, i.e., the holder on "exercise" is issued Coeur d’Alene shares having a value equal to the in-the-money value of the warrants.  As no exchangeable shares are offered, there will be no Canadian rollover.

Orko will then be merged under the plan of arrangement with the Coeur d’Alene subsidiary (now its parent), with Orko as the sole surviving corporation.  CRA has ruled that this type of merger (i.e., with the subsidiary as the survivor) qualifies under s. 87 as a good amalgamation (2010-0355941R3).

Neal Armstrong.  Summary of Orko Silver Circular under Cross-Border Acquisitions - Inbound – Other.