Silver King Mines Inc. and Pacific Silver Corp. have cleared one more hurdle in plans to turn their Alta Gold Co. subsidiary into a sister company, officials said.
The Securities and Exchange Commission has cleared the way for Silver King and Pacific Silver to distribute to their shareholders 14.8 million shares of common stock of their Alta Gold subsidiary.The final hurdle to the stock distribution proposal, said Dan Bushnell, chairman and chief executive officer of all three companies, is a favorable tax ruling from the Internal Revenue Service.
Under the distribution plan, Silver King stockholders would receive one share of Alta Gold common stock for each two shares of Silver King. Pacific Silver shareholders would receive one Alta share for each three Pacific Silver shares.
"Our position is this would not be a taxable event," said Bushnell. "If the IRS determines it is taxable, the cost would be about $30 million, and we wouldn't go through with it."
Silver King and Pacific Silver are independent companies that each own 50 percent of the same copper, gold, lead, silver and zinc mining properties, primarily in Colorado, Idaho, Nevada and Montana. They created Alta Gold to handle their precious minerals operations.
The SEC ruling requires the companies to accompany the Alta Gold shares distribution with information on Alta Gold and to file information with the commission on or before the distribution. Once distributed, the shares of Alta Gold would be free trading.