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St. Elias Mines plans spin-out of BC assets into new public company

St. Elias Mines (CVE:SLI) announced Wednesday that it intends to spin out its British Columbia properties into a new public company, leaving it to focus on its assets in Peru.

"Management and board of directors of St. Elias believe that the current market price of the company's shares does not adequately reflect the underlying value of its British Columbia mineral properties," said president and CEO, Lori McClenahan.

"The proposed spinout is an excellent opportunity for shareholders to maximize the value of their St. Elias holdings."

Under the terms of the proposed transaction, St. Elias will transfer 100% of its interest in all of its British Columbia mineral properties to Havilah Mines, the new company incorporated for the purpose of the spin-out arrangement.

St. Elias will retain its holdings in its gold properties in Peru, and will not have any change in its capitalization, it said.

With the transaction, current shareholders of St. Elias will be entitled to receive one common share of Havilah for every 20 common shares of St. Elias held as of the effective date.

The company said that no St. Elias options or warrants will entitle holders to receive any shares of Havilah, unless holders exercise these options or warrants prior to the effective date.

An application will be made to list Havilah's common shares on the TSX Venture Exchange. The spin-out arrangement remains subject to stock market, regulatory, court and shareholder approval.

St. Elias' gold properties in Peru include Tesoro, Vilcoro and Cueva Blanca. At Tesoro, the company announced just last week that it started a 10,000 metre drill campaign at the site, designed to test the near-surface and deep-seated geophysical anomalies identified by earlier surveys.