Nemaska Exploration (TSX-V: NMX and OTC Other: NMKEF) announced today the reciept of a final prospectus filed with the regulatory authorities in Quebec, Ontario, Alberta and British Columbia, with respect to a public offering of between $2,000,000 and $6,000,000 in the capital stock of Monarques Resources Inc. in a combination of units and flow through shares.
From today’s release:
Monarques has agreed, conditional upon closing of the Offering, to purchase all rights, titles and interests owned by Nemaska in the Lac Arques, Lac des Montagnes and Lac Levac properties for a purchase price of $7,500,000 by issuing, as at the closing date of the Offering, an aggregate of 18,750,000 Common Shares at a price of $0.40 per Common Share. Nemaska intends to distribute 3,685,645 of these 18,750,000 Common Shares to its shareholders as a dividend. The record date to determine the shareholders allowed to receive the proposed dividend remains to be confirmed.
This is great news for Nemaska and its shareholders as what it essentially does is “spin-off” it’s non-lithium assets to newco Monarques and creates a a “pure-play” situation for their Quebec based Whabouchi lithium project, which the company is preparing to put into production in the near term (target of 2013) with the help of their stategic partner, Asian lithium-ion battery giant Tianqi Group, which could purchase up to 50% of the Company’s lithium production and assist in distributing the remainder to other Chinese lithium product makers as well as provide needed financing to bring Whabouchi into production, thus mitigating the need for Nemaska to revisit the capital markets – but it also sets up the situation wherein all shareholders of a soon to be announced record date will recieve a dividend of Monarques shares pro rata to the number of shares owned in Nemaska. Also, Nemaska looks to be getting good value for their non-lithium assets by virtue of the fact that they will be left with roughly 15 million shares of Monarques Resources after paying out the dividend shares in a well financed new company.
We have included links below to the updated research notes for Nemaska by eResearch which covers these topics in more detail.
If it’s one thing every investor likes – it’s a nice dividend check (or stock certificate) in the mail – so everyone should take a close look at Nemaska right now, because if you’re a shareholder as of the upcoming record date, you’re going to get an invitation to the Monarques Resources Dance just for being in the club!
Link to full press release here