Laramide Spin-off Transaction: Treasury Metals Inc.
(UPDATED: Thursday September 11, 2008)
1. What is the CUSIP of Treasury Metals and where is it trading?
The CUSIP is 894647106, and Treasury Metals trades on the TSX under the symbol “TML”.
2. How many shares are issued and outstanding?
There are 26,788,715 shares issued and outstanding, including 3,286,975 shares issued to Teck Cominco and Corona Gold on August 19 in settlement of the final payment owing to them for the purchase of the Thunder Lake properties.
3. Who are the shareholders of Treasury Metals?
The main shareholders are the Laramide shareholders, who received TML shares as a Return of Capital (“ROC”). A total of 16,459,167 TML shares were distributed to Laramide shareholders, or 61.4% of the TML issued and outstanding shares. The largest shareholders are as follows:
Laramide shareholders: 61.4%
Laramide Resources: 15.3%
Teck Cominco/ Corona: 12.3%
3. Are there any trading restrictions on the shares distributed to LAM Shareholders?
All the shares are freely trading, as the prospectus qualifies their issuance.
4. When will investors receive their certificates of Treasury?
This depends on how each investor holds his or her shares. For shareholders receiving registered shares (evidenced by ownership of share certificates), the TML Transfer Agent expects to mail certificates by Tuesday August 26. For shareholders holding non-registered shares in their brokerage accounts, the timeframe will depend on how quickly the brokerage processes the entries. For US and International shareholders, physical certificates are being delivered to the various brokerage houses, who will then allot the shares to individual accounts. If shareholders are finding delays in processing, please contact your broker or call Treasury Metals or Laramide, and we will attempt to help you.
5. What is the record date and payment date for the Return of Capital?
The record date and payment date were both August 21, 2008. Shareholders of record August 21 were eligible to receive the distribution as of the close of business August 21. In practical terms, this means that August 22, 2008 became the date when the Transfer Agent commenced the process of distributing the shares, but share certificates will reflect August 21 as the effective date.
6. How many shares of Treasury Metals will each Laramide shareholder receive?
The ratio is 3.8:1 meaning you will receive one TML share for each 3.8 LAM shares you own. All fractions will be rounded down to the nearest whole number. For example, if you own 2500 shares LAM, you will receive (2500/3.8 = 657.9) 657 shares TML.
7. What is my cost basis for the new TML shares if I received them as part of the Return of Capital (“ROC”)?
Your cost of TML will be the price at the close August 21, 2008 of $1.40. This is the adjusted cost base for any shareholder who purchased August 21, 2008. Like any shareholder who purchased August 21, 2008, you will have a taxable event when you dispose of your shares by selling them, and your adjusted cost base for tax purposes will be $1.40. If you are a TML shareholder who received your shares by way of the ROC, then your adjusted cost base for Laramide should be decreased by the amount of the ROC. In other words, if you paid $3.00 per share for your shares of Laramide when you originally purchased, then your new adjusted cost base will be decreased by ($1.40/3.8) or 36.8 cents per share, for a new adjusted cost base of $2.63 per LAM share.If the adjusted cost base becomes negative by virtue of this reduction, the negative amount is deemed to be an immediate capital gain in 2008 for Canadian taxpayers, with the cost base then becoming zero.
8. Are US shareholders and international shareholders of LAM entitled to the dividend, and how will it be taxed?
Yes, Canadian, US and international shareholders are all entitled to the Return of Capital, with the tax treatment as described in Answer 7 above. The Return of Capital will not trigger any withholding tax as a distribution, but will impact the adjusted cost base for Laramide shares as described above.
