Foremost Clean Energy Announces Court Approval of Spin-Out of Rio Grande Resources

Rhea-AI Summary

Foremost Clean Energy (NASDAQ: FMST) has received final approval from the Supreme Court of British Columbia for its planned spin-out of gold and silver properties through Rio Grande Resources The arrangement, which was previously approved by 99.86% of shareholders on December 20, 2024, involves the spin-out of the Winston Property located in Sierra County, New Mexico.

Upon completion expected in January 2025, shareholders will receive one new common share of Foremost and two common shares of Rio Grande for each Foremost share held prior to the effective date. The arrangement remains subject to final approval from the Canadian Securities Exchange.

Positive

• 99.86% shareholder approval indicates strong support for the spin-out
• Shareholders will receive additional shares through the 2:1 Rio Grande distribution
• Court approval represents significant progress in completing the arrangement

Negative

• Transaction still pending CSE final approval
• Spin-out will reduce company's asset portfolio diversity

Insights

Corporate Finance Expert

This court-approved spin-off represents a strategic restructuring that will create two distinct companies focused on different resource portfolios. The spin-out ratio of 1:2 (one new Foremost share plus two Rio Grande shares for each existing Foremost share) suggests a significant value allocation to the Winston Property assets.

The overwhelming shareholder approval of 99.86% indicates strong investor confidence in the strategic rationale behind this separation. This restructuring allows Foremost to concentrate on its core uranium and lithium exploration activities while giving shareholders direct exposure to gold and silver assets through Rio Grande shares. From a market perspective, this type of separation typically aims to unlock shareholder value by allowing each entity to attract investors specifically interested in their respective commodities.

The pending CSE approval remains the final major hurdle, but given the court approval and shareholder support, this appears to be a formality. For investors, this spin-off creates a pure-play opportunity in both the critical minerals sector (uranium/lithium) and precious metals (gold/silver), potentially leading to more efficient market valuations for both entities.

Mining Industry Analyst

The separation of Foremost's New Mexico gold and silver assets into Rio Grande Resources represents a strategic optimization of the asset portfolio. This move aligns with industry trends where companies are increasingly focusing on specific commodity groups to enhance operational efficiency and market positioning. The Winston Property in Sierra County, historically a significant mining district, will benefit from dedicated management attention and focused capital allocation under Rio Grande.

For retail investors, this restructuring provides flexibility to adjust their exposure to different commodity sectors. Those bullish on uranium and lithium can maintain their Foremost positions, while those interested in precious metals can hold or increase their Rio Grande allocation. The 1:2 distribution ratio suggests substantial value attribution to the Winston Property, indicating management's confidence in the gold and silver assets' potential.

VANCOUVER, British Columbia, Jan. 13, 2025 (GLOBE NEWSWIRE) -- Foremost Clean Energy Ltd. (NASDAQ: FMST) (CSE: FAT) (“Foremost” or the “Company”), an emerging North American uranium and lithium exploration company, is pleased to announce that the Company has obtained a final order from the Supreme Court of British Columbia approving the proposed plan of arrangement (the “Arrangement”) under which the Company will spin-out its gold and silver properties located in Sierra County, New Mexico, United States (collectively, the “Winston Property”) to shareholders through Rio Grande Resources Ltd. (“Rio Grande”), a wholly-owned subsidiary of the Company.

The Arrangement was previously approved by 99.86% of votes cast by Foremost shareholders (the “Shareholders”) at the annual general and special meeting of Shareholders held on December 20, 2024. Subject to the satisfaction or waiver of the remaining closing conditions set forth in the arrangement agreement, including final approval of the Canadian Securities Exchange (the “CSE”), Foremost expects that the Arrangement will become effective in January, 2025.

Upon completion of the Arrangement, each Shareholder as of immediately prior to the closing date of the Arrangement (the "Effective Date"), will receive one (1) new common share of Foremost and two (2) common shares of Rio Grande (the “Rio Shares") for each common share of Foremost held immediately prior to the Effective Date.

Additional information regarding the terms of the Arrangement, including a summary of the terms and conditions of the arrangement agreement, is set out in the Company’s information circular dated November 12, 2024, which is filed under Foremost’s profile on SEDAR+ profile at www.sedarplus.ca.

About Foremost

Foremost Clean Energy Ltd. (NASDAQ: FMST) (CSE: FAT) (WKN: A3DCC8) is an emerging North American uranium and lithium exploration company. The Company holds an option to earn up to a 70% interest in 10 prospective uranium properties (with the exception of the Hatchet Lake, where Foremost is able to earn up to 51%), spanning over 330,000 acres in the prolific, uranium-rich Athabasca Basin region of northern Saskatchewan. As the demand for carbon-free energy continues to accelerate, domestically mined uranium and lithium are poised for dynamic growth, playing an important role in the future of clean energy. Foremost’s uranium projects are at different stages of exploration, from grassroots to those with significant historical exploration and drill-ready targets. The Company’s mission is to make significant discoveries alongside and in collaboration with Denison Mines Corp. (TSX: DML, NYSE American: DNN), through systematic and disciplined exploration programs.

Foremost also has a portfolio of lithium projects at varying stages of development, which are located across 55,000+ acres in Manitoba and Quebec. For further information, please visit the Company’s website at www.foremostcleanenergy.com.

Contact and Information

Company
Jason Barnard, President and CEO
+1 (604) 330-8067 
info@foremostcleanenergy.com

Investor Relations
Lucas A. Zimmerman
Managing Director
MZ Group - MZ North America
(949) 259-4987
FMST@mzgroup.us
www.mzgroup.us

Follow us or contact us on social media:
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Forward-Looking Statements

Except for the statements of historical fact contained herein, the information presented in this news release and oral statements made from time to time by representatives of the Company are or may constitute “forward-looking statements” as such term is used in applicable United States and Canadian laws and including, without limitation, within the meaning of the Private Securities Litigation Reform Act of 1995, for which the Company claims the protection of the safe harbor for forward looking statements. Such forward-looking statements and forward-looking information include, but are not limited to, the satisfaction or waiver of the conditions to the Arrangement, the proposed benefits of the Arrangement, and the business objectives of Foremost. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any other statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect,” “is expected,” “anticipates” or “does not anticipate,” “plans,” “estimates” or “intends,” or stating that certain actions, events or results “may,” “could,” “would,” “might” or “will” be taken, occur or be achieved) are not statements of historical fact and should be viewed as forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, the availability of capital to fund programs and the resulting dilution caused by the raising of capital through the sale of shares, continuity of agreements with third parties, the satisfaction of the conditions to the Arrangement, risks and uncertainties associated with the environment and delays in obtaining governmental approvals, permits or financing. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Many of these factors are beyond the Company’s ability to control or predict. Important factors that may cause actual results to differ materially and that could impact the Company and the statements contained in this news release can be found in the Company’s filings on SEDAR+ and Edgar. The Company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release and in any document referred to in this news release. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities. Please refer to the Company’s most recent filings under its profile at on SEDAR+ at www.sedarplus.ca and on Edgar at www.sec.gov for further information respecting the risks affecting the Company and its business.

The CSE has neither approved nor disapproved the contents of this news release and accepts no responsibility for the adequacy or accuracy hereof.

FAQ

What is the share distribution ratio in FMST's Rio Grande spin-out?

Shareholders will receive one new Foremost (FMST) share and two Rio Grande shares for each Foremost share held before the effective date.

When will FMST complete the Rio Grande Resources spin-out?

The spin-out is expected to be completed in January 2025, subject to final CSE approval.

What assets are included in FMST's Rio Grande spin-out?

The spin-out includes the Winston Property, which consists of gold and silver properties located in Sierra County, New Mexico.

What percentage of FMST shareholders approved the Rio Grande spin-out?

99.86% of Foremost shareholders voted in favor of the spin-out arrangement at the December 20, 2024 meeting.