Manganese X Energy (TSXV: MN) has entered an agreement with subsidiary Graphano Energy for a spinout of its Lac Aux Bouleaux graphite property in Quebec, which would result in Graphano becoming an independent public company with its own funding sources.
Under this arrangement, Manganese X shareholders are expected to receive, in exchange for each common share held, one new common share of the company (with identical terms) and one-eighth of a common share in the capital of Graphano.
On completion of the spinout, Graphano will cease to be a wholly-owned subsidiary of the company. Manganese X will continue to focus on the exploration and development of its Battery Hill manganese and Peter Lake copper-nickel-cobalt-gold-silver projects, located in New Brunswick and Quebec, respectively.
Meanwhile, Graphano is expected to focus on the exploration and development of the LAB graphite property as an independent public company listed on the TSX Venture Exchange.
The company intends to hold a shareholder meeting to approve the arrangement in Q1 2021.
Graphano has also completed a private placement of subscription receipts priced at C$0.05 each for aggregate gross proceeds of C$2.72 million.
Each subscription receipt will entitle the holder thereof to receive one unit of Graphano, with each unit comprising one Graphano share and one common share purchase warrant. Each warrant is exercisable into one Graphano share at an anticipated exercise price of C$0.08 for a period of two years.
Shares of Manganese X Energy jumped 21.4% on the TSXV by noon EST Wednesday. The junior miner has a market capitalization of approximately C$27 million.