Sprott Resource Corp. agrees to a price reduction to complete PBS sale

Sprott Resource Corp. agrees to a price reduction to complete PBS sale

Sprott Resource Corp. announced that SRC, along with other principal shareholders of PBS Coals Limited, have reached an agreement with PBS, PBS Coals Corporation, Mining Holding Company LLC, a holding company in OAO Severstal’s Resource Division and 7027940 Canada Limited , a subsidiary of Severstal Resources, pursuant to which the Offeror has agreed to take up and pay for all common shares tendered into its September 5, 2008 offer at a price of C$8.30 per share and waive all conditions to the Offer. The expiry time of the Offer was 11:59 pm (Eastern) on October 24, 2008. The Offeror has agreed to take up and pay for the shares tendered into the Offer no later than November 3, 2008, subject to an extension for payment to November 5, 2008 with regulatory approval.

SRC owns 27,144,938 shares of PBS. If the Offeror takes up and pays for the shares under the Offer, after giving effect to the C$84,478,886 price reduction under the Supplemental Agreement, as part of the total price reduction of C$381,960,000 by principal shareholders, SRC will receive net proceeds of C$140,824,099 on the sale of its PBS shares.

“Under the circumstances, we are pleased to be able to resolve the outstanding issues between the parties and reach this agreement”, said Kevin Bambrough, President and CEO of SRC. “We would like to thank all the other principal shareholders as well as management of PBS for their cooperation throughout the process.”

SRC is a Canadian based company, the primary purpose of which is to invest, directly and indirectly, in natural resources. Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. SRC is well positioned to draw upon the considerable experience and expertise of both its Board of Directors and Sprott Consulting Limited Partnership (SCLP), of which Sprott Asset Management Inc. is the sole limited partner. Pursuant to a management services agreement between SCLP and SRC, SCLP provides day-to-day business management for SRC as well as other management and administrative services.

Share this post