inShare Pdf Argex Mining to sell Mouchalagane property, first step in spin out process

Argex Mining (CVE:RGX) said late Monday that its board has approved the sale of the Mouchalagane iron ore property to its subsidiary Impact Iron Mines, the first step in a spin out process to create two public companies.
The Mouchalagane iron ore property is situated approximately 275 kilometres north of Baie-Comeau, Quebec, next to the Manicouagan reservoir, and is composed of one block of 637 claim cells covering 335 kilometres.
According to the proposed deal, Argex will receive a cash payment of $2 million, and 10 million shares of Impact Iron Mines at $1 per share, with an added five million shares in the event an NI 43-101 compliant resource estimate shows at least 100 million tonnes of net iron content on the Mouchalagane property.
The company plans to distribute to its shareholders the 10 million shares of Impact Iron Mines that it will receive as consideration.
In a statement, chief executive, Roy Bonnell, said: “The sale of the Mouchalagane property to Impact Iron Mines is the first step in the spin-off process to create two public companies: Argex as a titanium dioxide pure-play and Impact as a pure iron ore company.”
Argex said it has the right to receive additional payments of $10 million upon initial shipment of two million tonnes of iron from the property, an additional $20 million upon shipment of an additional five million tonnes of iron, and a further $30 million for another eight million tonnes of iron shipped.
The board has unanimously approved the sale of the property, Argex said. The proposed transaction is subject to signing of a definitive agreement and regulatory approval.
Mouchalagane is an undeveloped iron ore property in the Fermont-Labrador City mining district with significant near-term mineral resource potential.
Exploration work was carried out on the asset in the 1950s, 60s and 70s, which consisted of mapping, diamond drilling and metallurgical testing, identifying a number of hematite-rich iron formations on the area.
On September 26, Argex reported the overall conceptual exploration potential to be within the range of 940 million tonnes and 2.31 billion tonnes of magnetite and hematite-rich mineralization, grading 30 to 35 percent total iron.
The Montreal-based company's stock rose four percent Tuesday morning to 39 cents on Toronto’s junior venture exchange.