Landore Resources Ltd (LON:LND) told investors it has entered into a debt settlement agreement in Canada with Lamaune Iron Inc.
The deal sees Landore will receive more than 576mln new shares in Lamaune in full satisfaction of the loan provided by Landore. It will mean that Landore will own just over 90% of Lamaune.
Landore, which back in 2011 demerged assets into Lamaune, said it believes it is in the best interests of shareholders to remerge Lamaune in order for the company to continue exploration across a greenstone belt that traverses the Landore-Lamaune properties.
The potential of these areas was highlighted by successful discovery of the BAM East Gold deposit in 2015, Landore highlighted.
It added that a review conducted after the BAM East find concluded that several prospects, including the Lamaune gold deposit, were similar in geology and mineralisation to the new discovery.
The debt settlement deal is deemed to be a related party transaction, as Bill Humphries and Richard Prickett are directors of both Landore and Lamaune.