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Canaco Resources Inc. announced it received shareholder approval for the spin-out of Tigray Resources Inc. ("Tigray") at a special meeting of shareholders held today in Vancouver.
The transaction will include the transfer of Canaco's 70% interest in Harvest Mining PLC, which owns the Harvest VMS Project in Ethiopia, to Tigray, along with $4 million, which represents 18 months' working capital and sufficient funds to conduct the recommended first phase drill program.The spin-out will be completed by way of plan of arrangement, whereby Canaco shareholders will be entitled to receive one common share of Tigray for every five common shares of Canaco held as of the effective date of the transaction, expected to be July 4, 2011. The spin-out transaction remains subject to final court approval, expected to be obtained on June 27, 2011, and final acceptance from the TSX Venture Exchange. Tigray has applied for a listing of its common shares on the TSX Venture Exchange which remains subject to fulfilling all of the listing conditions. The Harvest Project is located in the southern extension of the Arabian‐Nubian Shield tectonic assemblage that stretches southward from Eritrea. This belt of rocks hosts a number of significant VMS mineral systems including Bisha and the deposits of the Asmara district (including Emba Derho, Debarwa, and Adi Nefas). The Harvest area is interpreted to lie within the prospective southern extension of the tectonostratigraphic belt hosting the Asmara deposits. These deposits characteristically comprise copper and zinc-bearing sulfide VMS mineralization that also contains significant gold and silver. The results of surficial sampling, as well as trench and diamond drill exploration, demonstrate that the geologic features and surficial metal enrichment at the Harvest Project exhibit similar characteristics to those of the VMS mineral systems such as Bisha identified in Eritrea. On completion of the spin-out, Tigray's initial mandate at the Harvest Project will be to complete geological, geochemical and geophysical profiling to establish targets for continued drill testing. An 11,000-metre first phase diamond drill program is planned for 2011, with an additional 3,000 metres follow-up drilling. It is currently expected that the transaction will be exempt from the registration requirements of the U.S. Securities Act of 1993, as amended(the "U.S. Securities Act"), pursuant to the exemption afforded by section 3(a)(10) from registration under the U.S. Securities Act. The securities offered have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. |
