BOUCHERVILLE, Que. – Strateco Resources Inc. (TSX:RSC) says it will spin off its subsidiary SeqUr Exploration Inc. as a separate public company in early January.
The announcement comes a day after about 17.5 million shares of Strateco were traded on the Toronto Stock Exchange, making the junior mineral exploration company the highest volume issue on Thursday and many times the average daily volume for the Strateco shares.
It also comes about a week after Strateco, based in Boucherville, Que., announced that it would seek about $190 million in compensation from the Quebec government, which Strateco says has refused to authorize the next stage in developing a uranium project in Quebec due to a “lack of social acceptability” — a term that it said hasn’t been defined under Quebec law.
Strateco announced Friday that it will spin off SeqUr by distributing all of its 15 million shares in the subsidiary, representing 75 per cent of the total, to Strateco shareholders of record as of Dec. 30. The distribution is expected to occur about Jan. 8.
The SeqUr spinoff had been approved at a May 27 meeting of Strateco shareholders, who authorized the board to choose the appropriate time for the stock distribution.
The company said Denison Mines Corp. (TSX:DML) has also agreed for SeqUr to postpone exploration work and payments for a Saskatchewan uranium project by a year.
SeqUr has an option to acquire up to 60 per cent ownership in the Jasper Lake project under an agreement with Denison, a prominent Canadian uranium producer based in Toronto.
SeqUr will get an additional year to pay the remaining $650,000 out of a $1 million initial payment that would give it a 49 per cent interest in the Jasper Lake project. SeqUr will also get an additional year to increase its ownership to 60 per cent by paying an additional payment of $2 million.
SeqUr’s obligations to perform exploration on the project have also been relaxed, with fewer claims to be covered at a reduced cost of $6 million, down from $8 million, according to Strateco.
Strateco share price at mid-afternoon was unchanged at 6.5 cents, giving the company a market value of $14.1 million. On Thursday, the shares gained two cents a share or 44 per cent to close Thursday at 6.5 cents per share. Trading volume at midday Friday was about 30,500 — below the junior mining company daily average volume of about 475,700 on the TSX.
Note to readers: This is a corrected story. An earlier headline misspelled Denison.