FireFly nears end of Ontario assets sale to Bellavista
TSX- and ASX-listed FireFly Metals has confirmed all conditions have been satisfied related to a share sale and purchase agreement with ASX-listed Bellavista Resources, whereby Bellavista is acquiring the Pickle Crow and Sioux Lookout projects, in Ontario.
The transaction will proceed by way of the sale of all the issued share capital of Auteco Minerals, in Canada, to Bellavista.
The consideration involves 60-million Bellavista shares upfront and 50-million contingent consideration performance rights.
The deal could be accelerated after FireFly and Bellavista agreed to waive certain conditions, such as a class ruling application made to the Australian Taxation Office (ATO) relating to certain income tax implications on the proposed pro-rata in-specie distribution of Bellavista shares to FireFly shareholders.
The class ruling application is principally concerned with confirming the Australian income tax consequences for receiving shareholders of the share transfer. The class ruling application has been submitted on the basis that the in-specie distribution constitutes a return of share capital for income tax purposes, consistent with advice received by FireFly from its tax advisers.
Based on correspondence with the ATO, however, FireFly has not received any indication that this position will change, however it is not expected that the finalised class ruling will be issued in the near term (which is consistent with past practice) to enable the transaction to complete.
Having regard to these positions, the FireFly board determined that awaiting finalisation of the class ruling would delay completion of the transaction between the companies without materially reducing the risk associated with the tax treatment of the in-specie distribution.
The companies expect the transaction to be complete on April 29.
FireFly shareholders will receive one in-specie share of about every 12.8 FireFly shares held. The company intends to retain the contingent consideration performance rights and, accordingly, these will not be distributed to FireFly shareholders under the in-specie distribution.
FireFly remains focused on advancing the high-grade Green Bay copper and gold project, in Newfoundland, Canada, which has 50-million tonnes of measured and indicated resources grading 2% copper equivalent.
The company also holds a 90% interest in the Limestone Well vanadium and titanium project in Western Australia.
