Sprott Resource Corp. (TSX: SCP) and Adriana Resources Inc. (TSX-V: ADI) have closed previously announced plan of arrangement pursuant to which Adriana Resources acquired 100% of the outstanding 96,672,102 Sprott Resource common shares and SRC became a wholly-owned subsidiary of ADI.
Immediately following completion of the transaction, Adriana Resources changed its name to Sprott Resource Holdings Inc. (TSX: SRHI)
In connection with the arrangement, Sprott Inc., Exploration Capital Partners 2008 Limited Partnership, and Term Oil Inc., a corporation controlled by Arthur Richards (Rick) Rule IV, Chairman of Sprott US Holdings Inc., invested, concurrently with the closing of the arrangement, an aggregate of $15 million in the new company.
Sprott Resource Holdings board of directors was reconstituted and is now made up of the current members of the board of directors of SRC (other than Peter Grosskopf, who is stepping down) together with Donald K. Charter, Chairman of ADI, Rule, and Xinting (Tony) Wang. Rick Rule is being appointed Vice Chairman of the board of directors of SRHI.
Wang is the nominee of WISCO International Resources Development and Investment Limited, which in turn is a subsidiary of China Baowu Iron & Steel Group Corporation Limited, a Chinese state-owned integrated iron and steel company. WISCO owned 19.2% of outstanding shares of ADI prior to the completion of the transaction.
The management of the company is being reconstituted and will be made up of the current SRC management together with Rule as Chief Investment Officer and Michael Harrison, former President and CEO of ADI, as Managing Director. Sprott Consulting Limited Partnership will continue to provide for day-to-day operations.
Sprott Resource Holdings intends to transition from a private equity firm to a diversified holding company focused on owning businesses that its management team believes can generate sustainable free cash flow or attractive returns on investment in the natural resource industry. Management expects that it will take less than 12 months to make the transition from a private equity firm to a diversified holding company.
photo credit: Adriana Resources