Great Bear Resources Ltd. (GBR:TSX.V; GTBDF:OTCQX) announced in a news release it plans to create and spin out to shareholders a 2% net smelter return (NSR) royalty on any potential future mineral production at its Dixie property in Ontario's Red Lake District.
The company will first put the NSR royalty in a wholly owned subsidiary, or spinco, then at a time to be determined by the board of directors, distribute the shares to Great Bear shareholders on a pro rata basis.
"The board reviewed the discovery and transaction history of similar gold discoveries and believes that a 2% NSR [royalty] has excellent potential to benefit our shareholders," Great Bear President and CEO Chris Taylor said in the release. "We believe we have a unique opportunity to create additional potential value for our shareholders through the creation of a royalty-focused company built on the future potential of this emerging, district-scale property."
Further details about the royalty arrangement will be announced when they become available.
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