Exploration company Conroy Diamonds and Gold plc (CDG) is to segregate its diamond and gold activities by creating a new company, Karelian Diamond Resources plc.
CDG says the move will give shareholders a better understanding of the group's separate spheres of activity as it moves from exploration into assessment at its gold prospects in Ireland.
The market value of the interests and assets to be transferred to Karelian is estimated at €2.66 million, according to CDG's independent valuers, CSA Group.
Chairman Prof Richard Conroy said: "The rationale behind the proposal is that Conroy's search for gold in Ireland has now moved from pure exploration to assessment and evaluation. The company believes that at this stage the segregation of its diamond interests from its other interests would enable it to focus on gold and give shareholders a better understanding of the company's two separate spheres of activity."
Under the terms of the reorganisation, CDG shareholders will receive one ordinary full-paid Karelian share for every six ordinary CDG shares held on the record date. It is then proposed that, on the day following the transfer of these interests to Karelian, the new company will acquire the diamond interests of Conroy plc, which has the same directors as CDG. The diamond interests are located in Finland.
The plan will be put to an e.gm. on July 8th. It is proposed that Karelian allocate 10,257,000 million fully-paid ordinary shares to members of CDG and 24,515,030 million shares to Conroy plc.
