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Benton Resources to separate its Coro Mining holdings through spin out

Published: 16:24 29 Mar 2011 EDT

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Benton Resources (CVE:BTC) said Tuesday it will separate its investment in Coro Mining (TSE:COP) from the rest of its assets by spinning out most of its projects, cash, and other equity investments into a new exploration company.

The move is designed to lift Benton's share price, which the company believes is undervalued.  Benton said its market capitalization of $77 million is "significantly" below the market value of its equity holdings in other listed companies.

Besides its holdings in Coro Mining, Benton also owns shares of Stillwater Mining Company (NYSE:SWC), Marathon Gold Corp. (TSE:MOZ), Puget Ventures (CVE:PVS), Mineral Mountain Resources Ltd. (CVE:MMV), and Bell Copper (CVE:BCU).

The company also said the market is attributing no value to its $12.6 million in cash resources, or its property portfolio and joint ventures with Teck Resources (NYSE:TCK) and Rio Tinto Exploration.

After the spin out is completed, Benton's remaining assets will consist of 55.4 million common shares of  Coro, representing about 41.6% of  the company, 2.43 million share purchase warrants, one undisclosed project and some cash.

Shares of the new exploration company are expected to be distributed to shareholders on a pro-rata basis.  The spin out is subject to regulatory and shareholder approvals.

Benton's share price was unchanged on Tuesday to close at $1 per share.

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