Shareholders of McNellen Resources (VSE) recently gave the go- ahead to a transaction in which Echo Bay Mines (TSE) will acquire two million McNellen shares at $2.50 per share.
Under the agreement, during a 30-day period starting on Oct 29, McNellen may require Echo Bay to exercise its conversion right by receiving two million shares in order to retire the $5-million loan.
If McNellen fails to do so within 60 days after the 30 day period, Echo Bay may require immediate retirement of the entire loan by exercising its conversion right.
McNellen plans to use the proceeds of the transaction to finance its 50% participation in the Magino joint venture with Muscocho Explorations (TSE) near Wawa, Ont.
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