Blackrock Gold Corp. (TSXV:BRC) (OTC:BKRRF) delivered some massive news today that could mean some great things for the company’s shareholders. The company is considering spinning off its Silver Cloud property into its own dedicated company in a move that could generate massive shareholder value.
With gold and silver prices reaching all-time highs, the company’s two major assets have become valuable enough that each might require the attention of dedicated teams.
As per the company’s announcement, Blackrock Gold Corp’s (TSXV:BRC) (OTC:BKRRF) board of directors is currently considering a proposal that would have the company transferring its Silver Cloud property in Northern Nevada to a newly created subsidiary. Blackrock would provide funding for this new company and Blackrock shareholders would receive one share of the new company for every three common shares of Blackrock. Shares in the new company would be subject to resale restrictions, with 25% of the SpinCo Shares being released from the restrictions at the time of completion of the spinout and a further 25% being released every four months thereafter.
“With gold hovering near all-time highs and our Tonopah West property dominating the show, we see this as the perfect backdrop to unlock value for investors by spinning out what was once our flagship property, Silver Cloud, into a separate, discovery-oriented public company,” President & CEO Andrew Pollard said in the company’s release.
Pollard says that the company in its current state is believed to be undervalued. This move would allow each of Blackrock’s massively high-potential properties to have fully dedicated purposely-built teams capable of extracting the full value of each. Blackrock’s leadership would be able to focus exclusively on restoring the Tonopah silver district back into a tier-one mining complex, while the team dedicated exclusively to the grassroots Silver Cloud project can focus on Northern Nevada exploration. Shareholders meanwhile would benefit from the new options that come with ownership of two public companies.
This move would be part of Blackrock Gold Corp’s (TSXV:BRC) (OTC:BKRRF) strategy to get the most out of the opportunity presented by the current gold and silver run. The ongoing public health crisis has sent the global economy into a tailspin that has shown no signs of slowing. Gold prices have remained consistently above $1,900 per ounce since late July. These conditions make Blackrock’s high-potential Tonopah West and Silver Cloud properties into incredibly valuable assets. The company is exploring moves like this spinoff in order to most efficiently take advantage of this rare opportunity.
To learn more about Blackrock Gold Corp’s (TSXV:BRC) (OTC:BKRRF), click here.
Featured image: DepositPhotos © albund
