Lode Gold's Strategic Spin-Out: Unlocking Value and Pure Play Opportunities

Lode Gold Resources Inc. (TSXV: LOD) (OTCQB: SBMIF) has announced a significant strategic move to create two pure-play companies, Lode Gold and Great Republic Mining (GRM), through a tax-efficient spin-out transaction. This strategic shift aims to unlock shareholder value and attract new investors by focusing on distinct exploration strategies.

The proposed spin-out involves a reverse takeover (RTO) transaction, where GRM will acquire all of the issued and outstanding shares of Lode Gold's subsidiary, 1475039 B.C. Ltd. (Gold Orogen). Upon closing, Lode Gold shareholders will own up to 74.16% of the issued and outstanding shares of the new entity, Fancamp Exploration Ltd. (Fancamp) will own 19.9%, and existing GRM shareholders will own 5.94%. The resulting entity will continue the business as Gold Orogen.

The spin-out transaction also presents potential synergies between Lode Gold and GRM. Both companies will have access to a diverse portfolio of exploration packages and funding opportunities. Lode Gold's strategic partnership with Fancamp, which involves a $2.5 million investment and a 19.9% stake in Gold Orogen, will provide additional funding for exploration activities.

The anticipated timing of the definitive agreement and submission to the CSE and TSXV is within the next two weeks. Audited financial statements and updated NI 43-101 reports for the listing projects, Golden Culvert/WIN, McIntyre Brook, and Riley Brook, have been completed. Gold Orogen plans to raise an additional $1.5 million through an equity private placement.

In conclusion, Lode Gold's strategic spin-out transaction creates two pure-play companies, enabling them to focus on distinct exploration strategies and unlock shareholder value. The transaction presents potential synergies in exploration packages and funding opportunities, while addressing the tax-efficient objectives of the shareholders and the company. As the transaction progresses, investors should closely monitor the developments and assess the potential benefits for Lode Gold shareholders in terms of diversification and potential growth opportunities.